Correlation Between Western Asset and Blackrock Floating
Can any of the company-specific risk be diversified away by investing in both Western Asset and Blackrock Floating 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 Blackrock Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset High and Blackrock Floating Rate, you can compare the effects of market volatilities on Western Asset and Blackrock Floating 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 Blackrock Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Blackrock Floating.
Diversification Opportunities for Western Asset and Blackrock Floating
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Blackrock is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Blackrock Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Floating Rate 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 High are associated (or correlated) with Blackrock Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Floating Rate has no effect on the direction of Western Asset i.e., Western Asset and Blackrock Floating go up and down completely randomly.
Pair Corralation between Western Asset and Blackrock Floating
Considering the 90-day investment horizon Western Asset is expected to generate 1.93 times less return on investment than Blackrock Floating. In addition to that, Western Asset is 1.03 times more volatile than Blackrock Floating Rate. It trades about 0.06 of its total potential returns per unit of risk. Blackrock Floating Rate is currently generating about 0.11 per unit of volatility. If you would invest 931.00 in Blackrock Floating Rate on August 28, 2024 and sell it today you would earn a total of 457.00 from holding Blackrock Floating Rate or generate 49.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset High vs. Blackrock Floating Rate
Performance |
| Timeline |
| Western Asset High |
| Blackrock Floating Rate |
Western Asset and Blackrock Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Blackrock Floating
The main advantage of trading using opposite Western Asset and Blackrock Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Blackrock Floating 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 Blackrock Floating will offset losses from the drop in Blackrock Floating's long position.| Western Asset vs. Pimco Dynamic Income | Western Asset vs. Pimco Corporate Income | Western Asset vs. Cornerstone Strategic Value | Western Asset vs. Cornerstone Strategic Return |
| Blackrock Floating vs. Eaton Vance Floating | Blackrock Floating vs. NXG NextGen Infrastructure | Blackrock Floating vs. GAMCO Natural Resources | Blackrock Floating vs. MFS Investment Grade |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |