Correlation Between NYSE Composite and Western Asset
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Western Asset Inflation, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Western Asset.
Diversification Opportunities for NYSE Composite and Western Asset
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Western is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation and NYSE Composite 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 NYSE Composite 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 Inflation has no effect on the direction of NYSE Composite i.e., NYSE Composite and Western Asset go up and down completely randomly.
Pair Corralation between NYSE Composite and Western Asset
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.07 times more return on investment than Western Asset. However, NYSE Composite is 2.07 times more volatile than Western Asset Inflation. It trades about 0.37 of its potential returns per unit of risk. Western Asset Inflation is currently generating about 0.09 per unit of risk. If you would invest 1,924,339 in NYSE Composite on September 5, 2024 and sell it today you would earn a total of 94,242 from holding NYSE Composite or generate 4.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Western Asset Inflation
Performance |
| Timeline |
NYSE Composite and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Western Asset Inflation
Pair trading matchups for Western Asset
Pair Trading with NYSE Composite and Western Asset
The main advantage of trading using opposite NYSE Composite and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Air Products and | NYSE Composite vs. Playtika Holding Corp | NYSE Composite vs. PepsiCo | NYSE Composite vs. NETGEAR |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |