Correlation Between Western Asset and Millerhoward High
Can any of the company-specific risk be diversified away by investing in both Western Asset and Millerhoward 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 Millerhoward High 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 Millerhoward High Income, you can compare the effects of market volatilities on Western Asset and Millerhoward 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 Millerhoward High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Millerhoward High.
Diversification Opportunities for Western Asset and Millerhoward High
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Millerhoward is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Millerhoward High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millerhoward 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 High are associated (or correlated) with Millerhoward High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millerhoward High Income has no effect on the direction of Western Asset i.e., Western Asset and Millerhoward High go up and down completely randomly.
Pair Corralation between Western Asset and Millerhoward High
If you would invest 1,256 in Millerhoward High Income on October 23, 2024 and sell it today you would earn a total of 0.00 from holding Millerhoward High Income or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
Western Asset High vs. Millerhoward High Income
Performance |
| Timeline |
| Western Asset High |
| Millerhoward High Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Western Asset and Millerhoward High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Millerhoward High
The main advantage of trading using opposite Western Asset and Millerhoward High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Millerhoward 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 Millerhoward High will offset losses from the drop in Millerhoward High's long position.| Western Asset vs. Western Asset Global | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Western Asset High |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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