Correlation Between Western Asset and Allient
Can any of the company-specific risk be diversified away by investing in both Western Asset and Allient 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 Allient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Investment and Allient, you can compare the effects of market volatilities on Western Asset and Allient 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 Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Allient.
Diversification Opportunities for Western Asset and Allient
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Allient is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Investment and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient 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 Investment are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Western Asset i.e., Western Asset and Allient go up and down completely randomly.
Pair Corralation between Western Asset and Allient
Considering the 90-day investment horizon Western Asset Investment is expected to under-perform the Allient. But the stock apears to be less risky and, when comparing its historical volatility, Western Asset Investment is 5.59 times less risky than Allient. The stock trades about -0.09 of its potential returns per unit of risk. The Allient is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest 1,805 in Allient on August 29, 2024 and sell it today you would earn a total of 729.00 from holding Allient or generate 40.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Investment vs. Allient
Performance |
| Timeline |
| Western Asset Investment |
| Allient |
Western Asset and Allient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Allient
The main advantage of trading using opposite Western Asset and Allient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Allient 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 Allient will offset losses from the drop in Allient's long position.| Western Asset vs. Pioneer Floating Rate | Western Asset vs. The Gabelli Equity | Western Asset vs. Pioneer Municipal High | Western Asset vs. Nuveen Global High |
| Allient vs. Summa Silver Corp | Allient vs. Paysafe | Allient vs. Red Branch Technologies | Allient vs. Arrow Electronics |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |