Correlation Between Western Asset and Ameritrans Capital
Can any of the company-specific risk be diversified away by investing in both Western Asset and Ameritrans Capital 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 Ameritrans Capital 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 Ameritrans Capital Corp, you can compare the effects of market volatilities on Western Asset and Ameritrans Capital 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 Ameritrans Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Ameritrans Capital.
Diversification Opportunities for Western Asset and Ameritrans Capital
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Western and Ameritrans is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Ameritrans Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameritrans Capital Corp 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 Ameritrans Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameritrans Capital Corp has no effect on the direction of Western Asset i.e., Western Asset and Ameritrans Capital go up and down completely randomly.
Pair Corralation between Western Asset and Ameritrans Capital
If you would invest 1,180 in Western Asset High on November 3, 2024 and sell it today you would earn a total of 29.00 from holding Western Asset High or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Asset High vs. Ameritrans Capital Corp
Performance |
| Timeline |
| Western Asset High |
| Ameritrans Capital Corp |
Western Asset and Ameritrans Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Ameritrans Capital
The main advantage of trading using opposite Western Asset and Ameritrans Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Ameritrans Capital 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 Ameritrans Capital will offset losses from the drop in Ameritrans Capital's long position.| Western Asset vs. Western Asset Global | Western Asset vs. Western Asset High | Western Asset vs. Voya Global Advantage | Western Asset vs. Voya Global Equity |
| Ameritrans Capital vs. Southwest Airlines | Ameritrans Capital vs. Uber Technologies | Ameritrans Capital vs. Amkor Technology | Ameritrans Capital vs. International Consolidated Airlines |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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