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 Managed, 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
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hunter and Western is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hunter Small Cap and Western Asset Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Managed 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 Managed 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 4.15 times more return on investment than Western Asset. However, Hunter Small is 4.15 times more volatile than Western Asset Managed. It trades about 0.06 of its potential returns per unit of risk. Western Asset Managed is currently generating about 0.06 per unit of risk. If you would invest 996.00 in Hunter Small Cap on November 1, 2024 and sell it today you would earn a total of 291.00 from holding Hunter Small Cap or generate 29.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Hunter Small Cap vs. Western Asset Managed
Performance |
| Timeline |
| Hunter Small Cap |
| Western Asset Managed |
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. Tiaa Cref High Yield Fund | Hunter Small vs. Siit High Yield | Hunter Small vs. Neuberger Berman Income | Hunter Small vs. Victory High Yield |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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