Correlation Between Western Asset and Ardelyx
Can any of the company-specific risk be diversified away by investing in both Western Asset and Ardelyx 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 Ardelyx 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 Ardelyx, you can compare the effects of market volatilities on Western Asset and Ardelyx 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 Ardelyx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Ardelyx.
Diversification Opportunities for Western Asset and Ardelyx
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Ardelyx is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Investment and Ardelyx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardelyx 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 Ardelyx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardelyx has no effect on the direction of Western Asset i.e., Western Asset and Ardelyx go up and down completely randomly.
Pair Corralation between Western Asset and Ardelyx
Considering the 90-day investment horizon Western Asset is expected to generate 8.59 times less return on investment than Ardelyx. But when comparing it to its historical volatility, Western Asset Investment is 7.85 times less risky than Ardelyx. It trades about 0.04 of its potential returns per unit of risk. Ardelyx is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 399.00 in Ardelyx on September 2, 2024 and sell it today you would earn a total of 168.00 from holding Ardelyx or generate 42.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Investment vs. Ardelyx
Performance |
| Timeline |
| Western Asset Investment |
| Ardelyx |
Western Asset and Ardelyx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Ardelyx
The main advantage of trading using opposite Western Asset and Ardelyx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Ardelyx 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 Ardelyx will offset losses from the drop in Ardelyx's long position.| Western Asset vs. Visa Class A | Western Asset vs. Diamond Hill Investment | Western Asset vs. Distoken Acquisition | Western Asset vs. Associated Capital Group |
| Ardelyx vs. Tff Pharmaceuticals | Ardelyx vs. Eliem Therapeutics | Ardelyx vs. Inhibrx | Ardelyx vs. Enliven Therapeutics |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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