Correlation Between GreenBank Capital and Western Asset
Can any of the company-specific risk be diversified away by investing in both GreenBank Capital 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 GreenBank Capital and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenBank Capital and Western Asset Global, you can compare the effects of market volatilities on GreenBank Capital 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 GreenBank Capital with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenBank Capital and Western Asset.
Diversification Opportunities for GreenBank Capital and Western Asset
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GreenBank and Western is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding GreenBank Capital and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and GreenBank Capital 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 GreenBank Capital 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 Global has no effect on the direction of GreenBank Capital i.e., GreenBank Capital and Western Asset go up and down completely randomly.
Pair Corralation between GreenBank Capital and Western Asset
Assuming the 90 days horizon GreenBank Capital is expected to generate 198.29 times more return on investment than Western Asset. However, GreenBank Capital is 198.29 times more volatile than Western Asset Global. It trades about 0.16 of its potential returns per unit of risk. Western Asset Global is currently generating about 0.06 per unit of risk. If you would invest 1.60 in GreenBank Capital on September 4, 2024 and sell it today you would lose (0.73) from holding GreenBank Capital or give up 45.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenBank Capital vs. Western Asset Global
Performance |
| Timeline |
| GreenBank Capital |
| Western Asset Global |
GreenBank Capital and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenBank Capital and Western Asset
The main advantage of trading using opposite GreenBank Capital and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenBank Capital 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.| GreenBank Capital vs. Western Asset Global | GreenBank Capital vs. Invesco Trust For | GreenBank Capital vs. Logan Ridge Finance | GreenBank Capital vs. Invesco Advantage MIT |
| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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