Correlation Between Blackrock Lifepath and Western Asset
Can any of the company-specific risk be diversified away by investing in both Blackrock Lifepath 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 Blackrock Lifepath and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Lifepath Dynamic and Western Asset Total, you can compare the effects of market volatilities on Blackrock Lifepath 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 Blackrock Lifepath with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Lifepath and Western Asset.
Diversification Opportunities for Blackrock Lifepath and Western Asset
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Blackrock and WESTERN is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Lifepath Dynamic and Western Asset Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Total and Blackrock Lifepath 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 Blackrock Lifepath Dynamic 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 Total has no effect on the direction of Blackrock Lifepath i.e., Blackrock Lifepath and Western Asset go up and down completely randomly.
Pair Corralation between Blackrock Lifepath and Western Asset
Assuming the 90 days horizon Blackrock Lifepath is expected to generate 38.8 times less return on investment than Western Asset. In addition to that, Blackrock Lifepath is 1.65 times more volatile than Western Asset Total. It trades about 0.0 of its total potential returns per unit of risk. Western Asset Total is currently generating about 0.1 per unit of volatility. If you would invest 904.00 in Western Asset Total on August 24, 2024 and sell it today you would earn a total of 4.00 from holding Western Asset Total or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Blackrock Lifepath Dynamic vs. Western Asset Total
Performance |
| Timeline |
| Blackrock Lifepath |
| Western Asset Total |
Blackrock Lifepath and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Lifepath and Western Asset
The main advantage of trading using opposite Blackrock Lifepath and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Lifepath 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.| Blackrock Lifepath vs. Blackrock Collegeadvantage 529 | Blackrock Lifepath vs. Blackrock Collegeadvantage 529 | Blackrock Lifepath vs. Blackrock Collegeadvantage 529 |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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