Correlation Between Western Asset and GreenBank Capital
Can any of the company-specific risk be diversified away by investing in both Western Asset and GreenBank Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Western Asset and GreenBank Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Global and GreenBank Capital, you can compare the effects of market volatilities on Western Asset and GreenBank Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Western Asset with a short position of GreenBank Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and GreenBank Capital.
Diversification Opportunities for Western Asset and GreenBank Capital
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and GreenBank is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and GreenBank Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenBank Capital and Western Asset is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Western Asset Global are associated (or correlated) with GreenBank Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenBank Capital has no effect on the direction of Western Asset i.e., Western Asset and GreenBank Capital go up and down completely randomly.
Pair Corralation between Western Asset and GreenBank Capital
Considering the 90-day investment horizon Western Asset Global is expected to generate 0.04 times more return on investment than GreenBank Capital. However, Western Asset Global is 23.13 times less risky than GreenBank Capital. It trades about 0.01 of its potential returns per unit of risk. GreenBank Capital is currently generating about -0.01 per unit of risk. If you would invest 1,173 in Western Asset Global on September 5, 2024 and sell it today you would earn a total of 1.00 from holding Western Asset Global or generate 0.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Asset Global vs. GreenBank Capital
Performance |
| Timeline |
| Western Asset Global |
| GreenBank Capital |
Western Asset and GreenBank Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and GreenBank Capital
The main advantage of trading using opposite Western Asset and GreenBank Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, GreenBank Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GreenBank Capital will offset losses from the drop in GreenBank Capital's long position.| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
| GreenBank Capital vs. ESE Entertainment | GreenBank Capital vs. St Georges Eco Mining Corp | GreenBank Capital vs. Victory Square Technologies | GreenBank Capital vs. PowerBand Solutions |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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