Correlation Between Locorr Dynamic and Western Asset
Can any of the company-specific risk be diversified away by investing in both Locorr Dynamic 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 Locorr Dynamic and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locorr Dynamic Equity and Western Asset High, you can compare the effects of market volatilities on Locorr Dynamic 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 Locorr Dynamic with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locorr Dynamic and Western Asset.
Diversification Opportunities for Locorr Dynamic and Western Asset
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Locorr and Western is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Locorr Dynamic Equity and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Locorr Dynamic 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 Locorr Dynamic Equity 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 High has no effect on the direction of Locorr Dynamic i.e., Locorr Dynamic and Western Asset go up and down completely randomly.
Pair Corralation between Locorr Dynamic and Western Asset
Assuming the 90 days horizon Locorr Dynamic Equity is expected to generate 3.87 times more return on investment than Western Asset. However, Locorr Dynamic is 3.87 times more volatile than Western Asset High. It trades about 0.49 of its potential returns per unit of risk. Western Asset High is currently generating about 0.2 per unit of risk. If you would invest 1,123 in Locorr Dynamic Equity on September 2, 2024 and sell it today you would earn a total of 64.00 from holding Locorr Dynamic Equity or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Locorr Dynamic Equity vs. Western Asset High
Performance |
| Timeline |
| Locorr Dynamic Equity |
| Western Asset High |
Locorr Dynamic and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locorr Dynamic and Western Asset
The main advantage of trading using opposite Locorr Dynamic and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locorr Dynamic 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.| Locorr Dynamic vs. Jhancock Short Duration | Locorr Dynamic vs. Ultra Short Fixed Income | Locorr Dynamic vs. Aqr Long Short Equity | Locorr Dynamic vs. Angel Oak Ultrashort |
| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |