Correlation Between Western Asset and Pioneer High
Can any of the company-specific risk be diversified away by investing in both Western Asset and Pioneer High 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 Pioneer High 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 Pioneer High Income, you can compare the effects of market volatilities on Western Asset and Pioneer High 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 Pioneer High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Pioneer High.
Diversification Opportunities for Western Asset and Pioneer High
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Pioneer is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and Pioneer High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer High Income 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 Pioneer High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer High Income has no effect on the direction of Western Asset i.e., Western Asset and Pioneer High go up and down completely randomly.
Pair Corralation between Western Asset and Pioneer High
Considering the 90-day investment horizon Western Asset is expected to generate 3.03 times less return on investment than Pioneer High. But when comparing it to its historical volatility, Western Asset Global is 1.48 times less risky than Pioneer High. It trades about 0.03 of its potential returns per unit of risk. Pioneer High Income is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 568.00 in Pioneer High Income on August 27, 2024 and sell it today you would earn a total of 218.00 from holding Pioneer High Income or generate 38.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Global vs. Pioneer High Income
Performance |
| Timeline |
| Western Asset Global |
| Pioneer High Income |
Western Asset and Pioneer High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Pioneer High
The main advantage of trading using opposite Western Asset and Pioneer High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Pioneer High 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 Pioneer High will offset losses from the drop in Pioneer High'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 |
| Pioneer High vs. MFS High Income | Pioneer High vs. MFS Investment Grade | Pioneer High vs. Eaton Vance National | Pioneer High vs. Invesco High Income |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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