Correlation Between Western Asset and Shenkman Short
Can any of the company-specific risk be diversified away by investing in both Western Asset and Shenkman Short 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 Shenkman Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Short and Shenkman Short Duration, you can compare the effects of market volatilities on Western Asset and Shenkman Short 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 Shenkman Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Shenkman Short.
Diversification Opportunities for Western Asset and Shenkman Short
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Shenkman is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Short and Shenkman Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenkman Short Duration 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 Short are associated (or correlated) with Shenkman Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenkman Short Duration has no effect on the direction of Western Asset i.e., Western Asset and Shenkman Short go up and down completely randomly.
Pair Corralation between Western Asset and Shenkman Short
Assuming the 90 days horizon Western Asset Short is expected to generate 1.68 times more return on investment than Shenkman Short. However, Western Asset is 1.68 times more volatile than Shenkman Short Duration. It trades about 0.26 of its potential returns per unit of risk. Shenkman Short Duration is currently generating about 0.4 per unit of risk. If you would invest 479.00 in Western Asset Short on October 20, 2024 and sell it today you would earn a total of 5.00 from holding Western Asset Short or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Western Asset Short vs. Shenkman Short Duration
Performance |
| Timeline |
| Western Asset Short |
| Shenkman Short Duration |
Western Asset and Shenkman Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Shenkman Short
The main advantage of trading using opposite Western Asset and Shenkman Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Shenkman Short 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 Shenkman Short will offset losses from the drop in Shenkman Short's long position.| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
| Shenkman Short vs. Shenkman Short Duration | Shenkman Short vs. Shenkman Short Duration | Shenkman Short vs. Shenkman Short Duration | Shenkman Short vs. Shenkman Floating Rate |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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