Correlation Between Johcm Emerging and Western Asset
Can any of the company-specific risk be diversified away by investing in both Johcm Emerging 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 Johcm Emerging and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johcm Emerging Markets and Western Asset Municipal, you can compare the effects of market volatilities on Johcm Emerging 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 Johcm Emerging with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johcm Emerging and Western Asset.
Diversification Opportunities for Johcm Emerging and Western Asset
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Johcm and Western is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Johcm Emerging Markets and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal and Johcm Emerging 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 Johcm Emerging Markets 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 Municipal has no effect on the direction of Johcm Emerging i.e., Johcm Emerging and Western Asset go up and down completely randomly.
Pair Corralation between Johcm Emerging and Western Asset
Assuming the 90 days horizon Johcm Emerging Markets is expected to under-perform the Western Asset. In addition to that, Johcm Emerging is 8.6 times more volatile than Western Asset Municipal. It trades about -0.12 of its total potential returns per unit of risk. Western Asset Municipal is currently generating about 0.19 per unit of volatility. If you would invest 725.00 in Western Asset Municipal on September 14, 2024 and sell it today you would earn a total of 6.00 from holding Western Asset Municipal or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johcm Emerging Markets vs. Western Asset Municipal
Performance |
| Timeline |
| Johcm Emerging Markets |
| Western Asset Municipal |
Johcm Emerging and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johcm Emerging and Western Asset
The main advantage of trading using opposite Johcm Emerging and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johcm Emerging 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.| Johcm Emerging vs. Western Asset Municipal | Johcm Emerging vs. T Rowe Price | Johcm Emerging vs. Multisector Bond Sma | Johcm Emerging vs. Doubleline Yield Opportunities |
| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |