Correlation Between Vy Clarion and Western Asset
Can any of the company-specific risk be diversified away by investing in both Vy Clarion 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 Vy Clarion and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vy Clarion Real and Western Asset Inflation, you can compare the effects of market volatilities on Vy Clarion 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 Vy Clarion with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vy Clarion and Western Asset.
Diversification Opportunities for Vy Clarion and Western Asset
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IVRIX and Western is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Vy Clarion Real and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation and Vy Clarion 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 Vy Clarion Real 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 Inflation has no effect on the direction of Vy Clarion i.e., Vy Clarion and Western Asset go up and down completely randomly.
Pair Corralation between Vy Clarion and Western Asset
Assuming the 90 days horizon Vy Clarion is expected to generate 2.99 times less return on investment than Western Asset. In addition to that, Vy Clarion is 2.75 times more volatile than Western Asset Inflation. It trades about 0.02 of its total potential returns per unit of risk. Western Asset Inflation is currently generating about 0.14 per unit of volatility. If you would invest 932.00 in Western Asset Inflation on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Western Asset Inflation or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vy Clarion Real vs. Western Asset Inflation
Performance |
| Timeline |
| Vy Clarion Real |
| Western Asset Inflation |
Vy Clarion and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vy Clarion and Western Asset
The main advantage of trading using opposite Vy Clarion and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vy Clarion 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.| Vy Clarion vs. Western Asset Inflation | Vy Clarion vs. Short Duration Inflation | Vy Clarion vs. Lord Abbett Inflation | Vy Clarion vs. Federated Hermes Inflation |
| Western Asset vs. Dimensional Retirement Income | Western Asset vs. Sierra E Retirement | Western Asset vs. Fidelity Managed Retirement | Western Asset vs. Saat Moderate Strategy |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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