Correlation Between Western Asset and AURELIUS Equity

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Can any of the company-specific risk be diversified away by investing in both Western Asset and AURELIUS Equity 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 AURELIUS Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Municipal and AURELIUS Equity Opportunities, you can compare the effects of market volatilities on Western Asset and AURELIUS Equity 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 AURELIUS Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and AURELIUS Equity.

Diversification Opportunities for Western Asset and AURELIUS Equity

WesternAURELIUSDiversified AwayWesternAURELIUSDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Western and AURELIUS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and AURELIUS Equity Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURELIUS Equity Oppo 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 Municipal are associated (or correlated) with AURELIUS Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURELIUS Equity Oppo has no effect on the direction of Western Asset i.e., Western Asset and AURELIUS Equity go up and down completely randomly.

Pair Corralation between Western Asset and AURELIUS Equity

If you would invest  702.00  in Western Asset Municipal on November 27, 2024 and sell it today you would earn a total of  51.00  from holding Western Asset Municipal or generate 7.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Western Asset Municipal  vs.  AURELIUS Equity Opportunities

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -4-2024
JavaScript chart by amCharts 3.21.15MHF AULRF
       Timeline  
Western Asset Municipal 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset Municipal are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly uncertain technical indicators, Western Asset may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.66.877.27.47.67.8
AURELIUS Equity Oppo 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days AURELIUS Equity Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AURELIUS Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Western Asset and AURELIUS Equity Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.85-2.15-1.45-0.75-0.04750.691.432.172.913.65 0.10.20.30.4
JavaScript chart by amCharts 3.21.15MHF AULRF
       Returns  

Pair Trading with Western Asset and AURELIUS Equity

The main advantage of trading using opposite Western Asset and AURELIUS Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, AURELIUS Equity 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 AURELIUS Equity will offset losses from the drop in AURELIUS Equity's long position.
The idea behind Western Asset Municipal and AURELIUS Equity Opportunities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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