Correlation Between Lsv Conservative and Western Asset
Can any of the company-specific risk be diversified away by investing in both Lsv Conservative 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 Lsv Conservative and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsv Servative Value and Western Asset Municipal, you can compare the effects of market volatilities on Lsv Conservative 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 Lsv Conservative with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsv Conservative and Western Asset.
Diversification Opportunities for Lsv Conservative and Western Asset
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lsv and Western is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Servative Value and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal and Lsv Conservative 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 Lsv Servative Value 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 Municipal has no effect on the direction of Lsv Conservative i.e., Lsv Conservative and Western Asset go up and down completely randomly.
Pair Corralation between Lsv Conservative and Western Asset
Assuming the 90 days horizon Lsv Servative Value is expected to generate 2.6 times more return on investment than Western Asset. However, Lsv Conservative is 2.6 times more volatile than Western Asset Municipal. It trades about 0.28 of its potential returns per unit of risk. Western Asset Municipal is currently generating about 0.11 per unit of risk. If you would invest 1,546 in Lsv Servative Value on September 4, 2024 and sell it today you would earn a total of 92.00 from holding Lsv Servative Value or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lsv Servative Value vs. Western Asset Municipal
Performance |
| Timeline |
| Lsv Servative Value |
| Western Asset Municipal |
Lsv Conservative and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsv Conservative and Western Asset
The main advantage of trading using opposite Lsv Conservative and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsv Conservative 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.| Lsv Conservative vs. Western Asset Municipal | Lsv Conservative vs. Sei Daily Income | Lsv Conservative vs. Materials Portfolio Fidelity | Lsv Conservative vs. Fa 529 Aggressive |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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