Correlation Between Msift High and Western Asset
Can any of the company-specific risk be diversified away by investing in both Msift High 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 Msift High and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Msift High Yield and Western Asset Smash, you can compare the effects of market volatilities on Msift High 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 Msift High with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Msift High and Western Asset.
Diversification Opportunities for Msift High and Western Asset
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Msift and Western is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Msift High Yield and Western Asset Smash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Smash and Msift High 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 Msift High Yield 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 Smash has no effect on the direction of Msift High i.e., Msift High and Western Asset go up and down completely randomly.
Pair Corralation between Msift High and Western Asset
Assuming the 90 days horizon Msift High Yield is expected to generate 0.46 times more return on investment than Western Asset. However, Msift High Yield is 2.19 times less risky than Western Asset. It trades about 0.46 of its potential returns per unit of risk. Western Asset Smash is currently generating about 0.0 per unit of risk. If you would invest 856.00 in Msift High Yield on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Msift High Yield or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Msift High Yield vs. Western Asset Smash
Performance |
| Timeline |
| Msift High Yield |
| Western Asset Smash |
Msift High and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Msift High and Western Asset
The main advantage of trading using opposite Msift High and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Msift High 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.| Msift High vs. Global Fixed Income | Msift High vs. Global E Portfolio | Msift High vs. Global E Portfolio | Msift High vs. Global E Portfolio |
| Western Asset vs. Franklin Mutual Beacon | Western Asset vs. Templeton Developing Markets | Western Asset vs. Franklin Mutual Global | Western Asset vs. Franklin Mutual Global |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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