Correlation Between Locorr Market and Western Asset
Can any of the company-specific risk be diversified away by investing in both Locorr Market 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 Market 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 Market Trend and Western Asset High, you can compare the effects of market volatilities on Locorr Market 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 Market with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locorr Market and Western Asset.
Diversification Opportunities for Locorr Market and Western Asset
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Locorr and Western is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Locorr Market Trend 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 Market 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 Market Trend 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 Market i.e., Locorr Market and Western Asset go up and down completely randomly.
Pair Corralation between Locorr Market and Western Asset
Assuming the 90 days horizon Locorr Market Trend is expected to under-perform the Western Asset. In addition to that, Locorr Market is 2.79 times more volatile than Western Asset High. It trades about -0.01 of its total potential returns per unit of risk. Western Asset High is currently generating about 0.12 per unit of volatility. If you would invest 576.00 in Western Asset High on September 12, 2024 and sell it today you would earn a total of 122.00 from holding Western Asset High or generate 21.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Locorr Market Trend vs. Western Asset High
Performance |
| Timeline |
| Locorr Market Trend |
| Western Asset High |
Locorr Market and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locorr Market and Western Asset
The main advantage of trading using opposite Locorr Market and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locorr Market 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 Market vs. Pimco Trends Managed | Locorr Market vs. Pimco Trends Managed | Locorr Market vs. SCOR PK | Locorr Market vs. Morningstar Unconstrained Allocation |
| Western Asset vs. Locorr Market Trend | Western Asset vs. Rbc Emerging Markets | Western Asset vs. Ep Emerging Markets | Western Asset vs. Origin Emerging Markets |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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