Correlation Between Guggenheim Limited and Western Asset
Can any of the company-specific risk be diversified away by investing in both Guggenheim Limited and Western Asset 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 Guggenheim Limited and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Limited Duration and Western Asset Managed, you can compare the effects of market volatilities on Guggenheim Limited and Western Asset 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 Guggenheim Limited with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Limited and Western Asset.
Diversification Opportunities for Guggenheim Limited and Western Asset
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guggenheim and WESTERN is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Limited Duration and Western Asset Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Managed and Guggenheim Limited 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 Guggenheim Limited Duration are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Managed has no effect on the direction of Guggenheim Limited i.e., Guggenheim Limited and Western Asset go up and down completely randomly.
Pair Corralation between Guggenheim Limited and Western Asset
Assuming the 90 days horizon Guggenheim Limited Duration is expected to generate 0.6 times more return on investment than Western Asset. However, Guggenheim Limited Duration is 1.67 times less risky than Western Asset. It trades about 0.2 of its potential returns per unit of risk. Western Asset Managed is currently generating about 0.1 per unit of risk. If you would invest 2,295 in Guggenheim Limited Duration on September 2, 2024 and sell it today you would earn a total of 150.00 from holding Guggenheim Limited Duration or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Limited Duration vs. Western Asset Managed
Performance |
| Timeline |
| Guggenheim Limited |
| Western Asset Managed |
Guggenheim Limited and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Limited and Western Asset
The main advantage of trading using opposite Guggenheim Limited and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Limited position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Guggenheim Limited vs. Guggenheim Total Return | Guggenheim Limited vs. Guggenheim Floating Rate | Guggenheim Limited vs. Guggenheim Macro Opportunities | Guggenheim Limited vs. Guggenheim Limited Duration |
| Western Asset vs. Diversified Municipal Portfolio | Western Asset vs. Western Asset Managed | Western Asset vs. Western Asset Managed | Western Asset vs. Nuveen High Yield |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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