Correlation Between Western Asset and Foxby Corp
Can any of the company-specific risk be diversified away by investing in both Western Asset and Foxby Corp 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 Foxby Corp 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 Foxby Corp, you can compare the effects of market volatilities on Western Asset and Foxby Corp 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 Foxby Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Foxby Corp.
Diversification Opportunities for Western Asset and Foxby Corp
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Foxby is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Foxby Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foxby Corp 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 Foxby Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foxby Corp has no effect on the direction of Western Asset i.e., Western Asset and Foxby Corp go up and down completely randomly.
Pair Corralation between Western Asset and Foxby Corp
If you would invest 705.00 in Western Asset Municipal on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Western Asset Municipal or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Western Asset Municipal vs. Foxby Corp
Performance |
| Timeline |
| Western Asset Municipal |
| Foxby Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Asset and Foxby Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Foxby Corp
The main advantage of trading using opposite Western Asset and Foxby Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Foxby Corp 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 Foxby Corp will offset losses from the drop in Foxby Corp's long position.| Western Asset vs. MFS Investment Grade | Western Asset vs. Eaton Vance National | Western Asset vs. Blackrock Muniyield Quality | Western Asset vs. DTF Tax Free |
| Foxby Corp vs. Aberdeen International | Foxby Corp vs. Bimini Capital Management | Foxby Corp vs. Eagle Capital Growth | Foxby Corp vs. Western Asset Municipal |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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