Correlation Between Western Asset and Touchstone Ultra
Can any of the company-specific risk be diversified away by investing in both Western Asset and Touchstone Ultra 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 Touchstone Ultra 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 Touchstone Ultra Short, you can compare the effects of market volatilities on Western Asset and Touchstone Ultra 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 Touchstone Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Touchstone Ultra.
Diversification Opportunities for Western Asset and Touchstone Ultra
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Touchstone is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Smash and Touchstone Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Ultra Short 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 Touchstone Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Ultra Short has no effect on the direction of Western Asset i.e., Western Asset and Touchstone Ultra go up and down completely randomly.
Pair Corralation between Western Asset and Touchstone Ultra
Assuming the 90 days horizon Western Asset is expected to generate 2.91 times less return on investment than Touchstone Ultra. In addition to that, Western Asset is 5.88 times more volatile than Touchstone Ultra Short. It trades about 0.01 of its total potential returns per unit of risk. Touchstone Ultra Short is currently generating about 0.25 per unit of volatility. If you would invest 822.00 in Touchstone Ultra Short on September 13, 2024 and sell it today you would earn a total of 103.00 from holding Touchstone Ultra Short or generate 12.53% 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. Touchstone Ultra Short
Performance |
| Timeline |
| Western Asset Smash |
| Touchstone Ultra Short |
Western Asset and Touchstone Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Touchstone Ultra
The main advantage of trading using opposite Western Asset and Touchstone Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Touchstone Ultra 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 Touchstone Ultra will offset losses from the drop in Touchstone Ultra's 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 |
| Touchstone Ultra vs. Cardinal Small Cap | Touchstone Ultra vs. Smallcap Growth Fund | Touchstone Ultra vs. Pace Smallmedium Value | Touchstone Ultra vs. Ab Small 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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