Correlation Between Western Asset and MCAN Mortgage
Can any of the company-specific risk be diversified away by investing in both Western Asset and MCAN Mortgage 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 MCAN Mortgage 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 MCAN Mortgage, you can compare the effects of market volatilities on Western Asset and MCAN Mortgage 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 MCAN Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and MCAN Mortgage.
Diversification Opportunities for Western Asset and MCAN Mortgage
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and MCAN is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and MCAN Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCAN Mortgage 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 MCAN Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCAN Mortgage has no effect on the direction of Western Asset i.e., Western Asset and MCAN Mortgage go up and down completely randomly.
Pair Corralation between Western Asset and MCAN Mortgage
Considering the 90-day investment horizon Western Asset Global is expected to under-perform the MCAN Mortgage. But the etf apears to be less risky and, when comparing its historical volatility, Western Asset Global is 2.36 times less risky than MCAN Mortgage. The etf trades about -0.11 of its potential returns per unit of risk. The MCAN Mortgage is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,320 in MCAN Mortgage on September 12, 2024 and sell it today you would earn a total of 80.00 from holding MCAN Mortgage or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Global vs. MCAN Mortgage
Performance |
| Timeline |
| Western Asset Global |
| MCAN Mortgage |
Western Asset and MCAN Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and MCAN Mortgage
The main advantage of trading using opposite Western Asset and MCAN Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, MCAN Mortgage 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 MCAN Mortgage will offset losses from the drop in MCAN Mortgage'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 |
| MCAN Mortgage vs. Guild Holdings Co | MCAN Mortgage vs. Mr Cooper Group | MCAN Mortgage vs. Encore Capital Group | MCAN Mortgage vs. CNFinance Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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