Correlation Between Jacob Micro and Western Asset
Can any of the company-specific risk be diversified away by investing in both Jacob Micro 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 Jacob Micro and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacob Micro Cap and Western Asset Diversified, you can compare the effects of market volatilities on Jacob Micro 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 Jacob Micro with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacob Micro and Western Asset.
Diversification Opportunities for Jacob Micro and Western Asset
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between JACOB and Western is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Jacob Micro Cap and Western Asset Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Diversified and Jacob Micro 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 Jacob Micro 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 Diversified has no effect on the direction of Jacob Micro i.e., Jacob Micro and Western Asset go up and down completely randomly.
Pair Corralation between Jacob Micro and Western Asset
Assuming the 90 days horizon Jacob Micro Cap is expected to generate 3.87 times more return on investment than Western Asset. However, Jacob Micro is 3.87 times more volatile than Western Asset Diversified. It trades about 0.02 of its potential returns per unit of risk. Western Asset Diversified is currently generating about 0.02 per unit of risk. If you would invest 2,310 in Jacob Micro Cap on December 4, 2024 and sell it today you would earn a total of 182.00 from holding Jacob Micro Cap or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Jacob Micro Cap vs. Western Asset Diversified
Performance |
| Timeline |
| Jacob Micro Cap |
| Western Asset Diversified |
Jacob Micro and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacob Micro and Western Asset
The main advantage of trading using opposite Jacob Micro and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacob Micro 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.| Jacob Micro vs. Pnc Emerging Markets | Jacob Micro vs. Dodge Cox Emerging | Jacob Micro vs. Hartford Schroders Emerging | Jacob Micro vs. Doubleline Emerging Markets |
| Western Asset vs. Rbc Emerging Markets | Western Asset vs. Templeton Developing Markets | Western Asset vs. Locorr Market Trend | Western Asset vs. Calvert Developed Market |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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