Correlation Between Fisher Large and Western Asset
Can any of the company-specific risk be diversified away by investing in both Fisher Large and Western Asset 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 Fisher Large and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fisher Large Cap and Western Asset Mortgage, you can compare the effects of market volatilities on Fisher Large and Western Asset 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 Fisher Large with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Large and Western Asset.
Diversification Opportunities for Fisher Large and Western Asset
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fisher and Western is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Large Cap and Western Asset Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Mortgage and Fisher Large 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 Fisher Large Cap are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Mortgage has no effect on the direction of Fisher Large i.e., Fisher Large and Western Asset go up and down completely randomly.
Pair Corralation between Fisher Large and Western Asset
Assuming the 90 days horizon Fisher Large Cap is expected to generate 2.45 times more return on investment than Western Asset. However, Fisher Large is 2.45 times more volatile than Western Asset Mortgage. It trades about 0.13 of its potential returns per unit of risk. Western Asset Mortgage is currently generating about 0.05 per unit of risk. If you would invest 1,452 in Fisher Large Cap on September 14, 2024 and sell it today you would earn a total of 463.00 from holding Fisher Large Cap or generate 31.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fisher Large Cap vs. Western Asset Mortgage
Performance |
| Timeline |
| Fisher Large Cap |
| Western Asset Mortgage |
Fisher Large and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fisher Large and Western Asset
The main advantage of trading using opposite Fisher Large and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Large position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Fisher Large vs. Fisher All Foreign | Fisher Large vs. Tactical Multi Purpose Fund | Fisher Large vs. Fisher Small Cap | Fisher Large vs. Fisher Stock |
| Western Asset vs. Franklin Mutual Beacon | Western Asset vs. Templeton Developing Markets | Western Asset vs. Franklin Mutual Global | Western Asset vs. Franklin Mutual Global |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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