Correlation Between Western Asset and Lmp Capital
Can any of the company-specific risk be diversified away by investing in both Western Asset and Lmp 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 Lmp 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 Lmp Capital And, you can compare the effects of market volatilities on Western Asset and Lmp 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 Lmp Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Lmp Capital.
Diversification Opportunities for Western Asset and Lmp Capital
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Lmp is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Lmp Capital And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lmp Capital And 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 Lmp Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lmp Capital And has no effect on the direction of Western Asset i.e., Western Asset and Lmp Capital go up and down completely randomly.
Pair Corralation between Western Asset and Lmp Capital
Considering the 90-day investment horizon Western Asset is expected to generate 3.11 times less return on investment than Lmp Capital. But when comparing it to its historical volatility, Western Asset High is 1.59 times less risky than Lmp Capital. It trades about 0.05 of its potential returns per unit of risk. Lmp Capital And is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,041 in Lmp Capital And on September 3, 2024 and sell it today you would earn a total of 742.00 from holding Lmp Capital And or generate 71.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset High vs. Lmp Capital And
Performance |
| Timeline |
| Western Asset High |
| Lmp Capital And |
Western Asset and Lmp Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Lmp Capital
The main advantage of trading using opposite Western Asset and Lmp Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Lmp 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 Lmp Capital will offset losses from the drop in Lmp 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 |
| Lmp Capital vs. Western Asset High | Lmp Capital vs. Brandywineglobal Globalome Opportunities | Lmp Capital vs. Virtus Global Multi | Lmp Capital vs. RiverNorth Specialty Finance |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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