Correlation Between Pace International and Western Asset
Can any of the company-specific risk be diversified away by investing in both Pace International 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 Pace International and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Emerging and Western Asset High, you can compare the effects of market volatilities on Pace International 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 Pace International with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and Western Asset.
Diversification Opportunities for Pace International and Western Asset
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pace and Western is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Pace International 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 Pace International Emerging 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 High has no effect on the direction of Pace International i.e., Pace International and Western Asset go up and down completely randomly.
Pair Corralation between Pace International and Western Asset
Assuming the 90 days horizon Pace International Emerging is expected to under-perform the Western Asset. In addition to that, Pace International is 4.65 times more volatile than Western Asset High. It trades about -0.25 of its total potential returns per unit of risk. Western Asset High is currently generating about 0.16 per unit of volatility. If you would invest 701.00 in Western Asset High on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Western Asset High or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace International Emerging vs. Western Asset High
Performance |
| Timeline |
| Pace International |
| Western Asset High |
Pace International and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace International and Western Asset
The main advantage of trading using opposite Pace International and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International 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.| Pace International vs. Pace Smallmedium Value | Pace International vs. Pace International Equity | Pace International vs. Pace International Equity | Pace International vs. Ubs Allocation Fund |
| Western Asset vs. Ab Value Fund | Western Asset vs. Aam Select Income | Western Asset vs. Iaadx | Western Asset vs. Arrow Managed Futures |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |