Correlation Between Western Asset and SOUTHERN
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By analyzing existing cross correlation between Western Asset Investment and SOUTHERN CALIF EDISON, you can compare the effects of market volatilities on Western Asset and SOUTHERN 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 SOUTHERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and SOUTHERN.
Diversification Opportunities for Western Asset and SOUTHERN
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and SOUTHERN is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Investment and SOUTHERN CALIF EDISON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN CALIF EDISON 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN CALIF EDISON has no effect on the direction of Western Asset i.e., Western Asset and SOUTHERN go up and down completely randomly.
Pair Corralation between Western Asset and SOUTHERN
Considering the 90-day investment horizon Western Asset is expected to generate 79.56 times less return on investment than SOUTHERN. But when comparing it to its historical volatility, Western Asset Investment is 59.37 times less risky than SOUTHERN. It trades about 0.03 of its potential returns per unit of risk. SOUTHERN CALIF EDISON is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,287 in SOUTHERN CALIF EDISON on September 12, 2024 and sell it today you would earn a total of 146.00 from holding SOUTHERN CALIF EDISON or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Western Asset Investment vs. SOUTHERN CALIF EDISON
Performance |
| Timeline |
| Western Asset Investment |
| SOUTHERN CALIF EDISON |
Western Asset and SOUTHERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and SOUTHERN
The main advantage of trading using opposite Western Asset and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN'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 |
| SOUTHERN vs. Western Asset Investment | SOUTHERN vs. Modine Manufacturing | SOUTHERN vs. CarsalesCom Ltd ADR | SOUTHERN vs. Visteon Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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