Correlation Between Blackrock and Western Asset
Can any of the company-specific risk be diversified away by investing in both Blackrock 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 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 Sm Cap and Western Asset Pennsylvania, you can compare the effects of market volatilities on Blackrock 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 with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock and Western Asset.
Diversification Opportunities for Blackrock and Western Asset
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blackrock and Western is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Sm Cap and Western Asset Pennsylvania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Pennsy and Blackrock 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 Sm Cap 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 Pennsy has no effect on the direction of Blackrock i.e., Blackrock and Western Asset go up and down completely randomly.
Pair Corralation between Blackrock and Western Asset
Assuming the 90 days horizon Blackrock Sm Cap is expected to generate 5.49 times more return on investment than Western Asset. However, Blackrock is 5.49 times more volatile than Western Asset Pennsylvania. It trades about 0.15 of its potential returns per unit of risk. Western Asset Pennsylvania is currently generating about 0.15 per unit of risk. If you would invest 2,516 in Blackrock Sm Cap on August 24, 2024 and sell it today you would earn a total of 129.00 from holding Blackrock Sm Cap or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Sm Cap vs. Western Asset Pennsylvania
Performance |
| Timeline |
| Blackrock Sm Cap |
| Western Asset Pennsy |
Blackrock and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock and Western Asset
The main advantage of trading using opposite Blackrock and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock 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 vs. Blackrock Intern Index | Blackrock vs. Blackrock Sp 500 | Blackrock vs. Blackrock Bond Index | Blackrock vs. Midcap Fund R 4 |
| Western Asset vs. Vanguard Pennsylvania Long Term | Western Asset vs. Vanguard Pennsylvania Long Term | Western Asset vs. Franklin Pennsylvania Tax Free | Western Asset vs. Franklin Pennsylvania Tax Free |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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