Correlation Between Western Asset and Delaware Investments
Can any of the company-specific risk be diversified away by investing in both Western Asset and Delaware Investments 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 Western Asset and Delaware Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Smash and Delaware Investments Ultrashort, you can compare the effects of market volatilities on Western Asset and Delaware Investments 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 Western Asset with a short position of Delaware Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Delaware Investments.
Diversification Opportunities for Western Asset and Delaware Investments
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Delaware is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Smash and Delaware Investments Ultrashor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Investments and Western Asset 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 Western Asset Smash are associated (or correlated) with Delaware Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Investments has no effect on the direction of Western Asset i.e., Western Asset and Delaware Investments go up and down completely randomly.
Pair Corralation between Western Asset and Delaware Investments
Assuming the 90 days horizon Western Asset is expected to generate 2.54 times less return on investment than Delaware Investments. In addition to that, Western Asset is 5.78 times more volatile than Delaware Investments Ultrashort. It trades about 0.01 of its total potential returns per unit of risk. Delaware Investments Ultrashort is currently generating about 0.22 per unit of volatility. If you would invest 899.00 in Delaware Investments Ultrashort on September 13, 2024 and sell it today you would earn a total of 97.00 from holding Delaware Investments Ultrashort or generate 10.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Western Asset Smash vs. Delaware Investments Ultrashor
Performance |
| Timeline |
| Western Asset Smash |
| Delaware Investments |
Western Asset and Delaware Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Delaware Investments
The main advantage of trading using opposite Western Asset and Delaware Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Delaware Investments 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 Delaware Investments will offset losses from the drop in Delaware Investments' long position.| Western Asset vs. Investec Emerging Markets | Western Asset vs. Sp Midcap Index | Western Asset vs. Aqr Long Short Equity | Western Asset vs. T Rowe Price |
| Delaware Investments vs. Optimum Small Mid Cap | Delaware Investments vs. Optimum Small Mid Cap | Delaware Investments vs. Ivy Apollo Multi Asset | Delaware Investments vs. Optimum Fixed Income |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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