Correlation Between Western Asset and Noah Holdings
Can any of the company-specific risk be diversified away by investing in both Western Asset and Noah Holdings 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 Noah Holdings 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 Noah Holdings, you can compare the effects of market volatilities on Western Asset and Noah Holdings 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 Noah Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Noah Holdings.
Diversification Opportunities for Western Asset and Noah Holdings
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Noah is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and Noah Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noah Holdings 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 Noah Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noah Holdings has no effect on the direction of Western Asset i.e., Western Asset and Noah Holdings go up and down completely randomly.
Pair Corralation between Western Asset and Noah Holdings
Considering the 90-day investment horizon Western Asset is expected to generate 87.74 times less return on investment than Noah Holdings. But when comparing it to its historical volatility, Western Asset Global is 8.52 times less risky than Noah Holdings. It trades about 0.01 of its potential returns per unit of risk. Noah Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 801.00 in Noah Holdings on September 5, 2024 and sell it today you would earn a total of 478.00 from holding Noah Holdings or generate 59.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Global vs. Noah Holdings
Performance |
| Timeline |
| Western Asset Global |
| Noah Holdings |
Western Asset and Noah Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Noah Holdings
The main advantage of trading using opposite Western Asset and Noah Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Noah Holdings 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 Noah Holdings will offset losses from the drop in Noah Holdings' 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 |
| Noah Holdings vs. Visa Class A | Noah Holdings vs. Diamond Hill Investment | Noah Holdings vs. Associated Capital Group | Noah Holdings vs. Deutsche Bank AG |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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