Correlation Between Hunter Small and Western Asset
Can any of the company-specific risk be diversified away by investing in both Hunter Small 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 Hunter Small and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hunter Small Cap and Western Asset Mortgage, you can compare the effects of market volatilities on Hunter Small 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 Hunter Small with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunter Small and Western Asset.
Diversification Opportunities for Hunter Small and Western Asset
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hunter and Western is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hunter Small Cap and Western Asset Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Mortgage and Hunter Small 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 Hunter Small Cap 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 Mortgage has no effect on the direction of Hunter Small i.e., Hunter Small and Western Asset go up and down completely randomly.
Pair Corralation between Hunter Small and Western Asset
Assuming the 90 days horizon Hunter Small Cap is expected to generate 2.47 times more return on investment than Western Asset. However, Hunter Small is 2.47 times more volatile than Western Asset Mortgage. It trades about 0.17 of its potential returns per unit of risk. Western Asset Mortgage is currently generating about 0.05 per unit of risk. If you would invest 1,238 in Hunter Small Cap on November 3, 2024 and sell it today you would earn a total of 36.00 from holding Hunter Small Cap or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hunter Small Cap vs. Western Asset Mortgage
Performance |
| Timeline |
| Hunter Small Cap |
| Western Asset Mortgage |
Hunter Small and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hunter Small and Western Asset
The main advantage of trading using opposite Hunter Small and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunter Small 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.| Hunter Small vs. James Alpha Structured | Hunter Small vs. Calamos Antetokounmpo Sustainable | Hunter Small vs. Ultra Short Fixed Income | Hunter Small vs. Vanguard Wellington Fund |
| Western Asset vs. Small Cap Equity | Western Asset vs. Locorr Dynamic Equity | Western Asset vs. Dws Equity Sector | Western Asset vs. Transamerica International Equity |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |