Correlation Between Fundamental Large and Western Asset
Can any of the company-specific risk be diversified away by investing in both Fundamental 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 Fundamental 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 Fundamental Large Cap and Western Asset Total, you can compare the effects of market volatilities on Fundamental 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 Fundamental Large with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Large and Western Asset.
Diversification Opportunities for Fundamental Large and Western Asset
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between FUNDAMENTAL and WESTERN is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Large Cap and Western Asset Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Total and Fundamental 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 Fundamental 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 Total has no effect on the direction of Fundamental Large i.e., Fundamental Large and Western Asset go up and down completely randomly.
Pair Corralation between Fundamental Large and Western Asset
Assuming the 90 days horizon Fundamental Large Cap is expected to generate 4.3 times more return on investment than Western Asset. However, Fundamental Large is 4.3 times more volatile than Western Asset Total. It trades about 0.36 of its potential returns per unit of risk. Western Asset Total is currently generating about 0.37 per unit of risk. If you would invest 7,810 in Fundamental Large Cap on September 5, 2024 and sell it today you would earn a total of 483.00 from holding Fundamental Large Cap or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundamental Large Cap vs. Western Asset Total
Performance |
| Timeline |
| Fundamental Large Cap |
| Western Asset Total |
Fundamental Large and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Large and Western Asset
The main advantage of trading using opposite Fundamental Large and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental 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.| Fundamental Large vs. Siit Global Managed | Fundamental Large vs. Artisan Global Unconstrained | Fundamental Large vs. Dreyfusstandish Global Fixed | Fundamental Large vs. Dreyfusstandish Global Fixed |
| Western Asset vs. Vela Large Cap | Western Asset vs. Fundamental Large Cap | Western Asset vs. Dodge Cox Stock | Western Asset vs. Qs Large Cap |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |