Correlation Between Western Asset and 70450YAM5
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By analyzing existing cross correlation between Western Asset Investment and PYPL 505 01 JUN 52, you can compare the effects of market volatilities on Western Asset and 70450YAM5 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 70450YAM5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and 70450YAM5.
Diversification Opportunities for Western Asset and 70450YAM5
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and 70450YAM5 is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Investment and PYPL 505 01 JUN 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PYPL 505 01 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 70450YAM5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PYPL 505 01 has no effect on the direction of Western Asset i.e., Western Asset and 70450YAM5 go up and down completely randomly.
Pair Corralation between Western Asset and 70450YAM5
Considering the 90-day investment horizon Western Asset Investment is expected to under-perform the 70450YAM5. But the stock apears to be less risky and, when comparing its historical volatility, Western Asset Investment is 1.98 times less risky than 70450YAM5. The stock trades about -0.14 of its potential returns per unit of risk. The PYPL 505 01 JUN 52 is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 9,738 in PYPL 505 01 JUN 52 on September 3, 2024 and sell it today you would lose (256.00) from holding PYPL 505 01 JUN 52 or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.88% |
| Values | Daily Returns |
Western Asset Investment vs. PYPL 505 01 JUN 52
Performance |
| Timeline |
| Western Asset Investment |
| PYPL 505 01 |
Western Asset and 70450YAM5 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and 70450YAM5
The main advantage of trading using opposite Western Asset and 70450YAM5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, 70450YAM5 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 70450YAM5 will offset losses from the drop in 70450YAM5'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 |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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