Correlation Between Western Asset and Pinetree Capital
Can any of the company-specific risk be diversified away by investing in both Western Asset and Pinetree 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 Pinetree 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 Pinetree Capital, you can compare the effects of market volatilities on Western Asset and Pinetree 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 Pinetree Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Pinetree Capital.
Diversification Opportunities for Western Asset and Pinetree Capital
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Pinetree is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and Pinetree Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinetree 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 Pinetree Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinetree Capital has no effect on the direction of Western Asset i.e., Western Asset and Pinetree Capital go up and down completely randomly.
Pair Corralation between Western Asset and Pinetree Capital
Considering the 90-day investment horizon Western Asset is expected to generate 297.58 times less return on investment than Pinetree Capital. But when comparing it to its historical volatility, Western Asset Global is 8.4 times less risky than Pinetree Capital. It trades about 0.01 of its potential returns per unit of risk. Pinetree Capital is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 652.00 in Pinetree Capital on September 5, 2024 and sell it today you would earn a total of 258.00 from holding Pinetree Capital or generate 39.57% 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. Pinetree Capital
Performance |
| Timeline |
| Western Asset Global |
| Pinetree Capital |
Western Asset and Pinetree Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Pinetree Capital
The main advantage of trading using opposite Western Asset and Pinetree Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Pinetree 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 Pinetree Capital will offset losses from the drop in Pinetree 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 |
| Pinetree Capital vs. Western Asset Global | Pinetree Capital vs. Invesco Trust For | Pinetree Capital vs. Logan Ridge Finance | Pinetree Capital vs. Invesco Advantage MIT |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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