Correlation Between Western Asset and Macquariefirst
Can any of the company-specific risk be diversified away by investing in both Western Asset and Macquariefirst 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 Macquariefirst 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 Macquariefirst Tr Global, you can compare the effects of market volatilities on Western Asset and Macquariefirst 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 Macquariefirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Macquariefirst.
Diversification Opportunities for Western Asset and Macquariefirst
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Macquariefirst is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Macquariefirst Tr Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquariefirst Tr Global 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 Macquariefirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquariefirst Tr Global has no effect on the direction of Western Asset i.e., Western Asset and Macquariefirst go up and down completely randomly.
Pair Corralation between Western Asset and Macquariefirst
If you would invest 437.00 in Western Asset High on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Western Asset High or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Western Asset High vs. Macquariefirst Tr Global
Performance |
| Timeline |
| Western Asset High |
| Macquariefirst Tr Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Western Asset and Macquariefirst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Macquariefirst
The main advantage of trading using opposite Western Asset and Macquariefirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Macquariefirst 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 Macquariefirst will offset losses from the drop in Macquariefirst's long position.| Western Asset vs. Western Asset High | Western Asset vs. Western Asset High | Western Asset vs. Blackrock Debt Strategies | Western Asset vs. Western Asset Diversified |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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