Correlation Between Strategic Asset and Westwood Short
Can any of the company-specific risk be diversified away by investing in both Strategic Asset and Westwood Short 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 Strategic Asset and Westwood Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Asset Management and Westwood Short Duration, you can compare the effects of market volatilities on Strategic Asset and Westwood Short 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 Strategic Asset with a short position of Westwood Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Asset and Westwood Short.
Diversification Opportunities for Strategic Asset and Westwood Short
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strategic and Westwood is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Asset Management and Westwood Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood Short Duration and Strategic 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 Strategic Asset Management are associated (or correlated) with Westwood Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood Short Duration has no effect on the direction of Strategic Asset i.e., Strategic Asset and Westwood Short go up and down completely randomly.
Pair Corralation between Strategic Asset and Westwood Short
Assuming the 90 days horizon Strategic Asset is expected to generate 1.43 times less return on investment than Westwood Short. In addition to that, Strategic Asset Management is as risky as Westwood Short. It trades about 0.16 of its total potential returns per unit of risk. Westwood Short Duration is currently generating about 0.23 per unit of volatility. If you would invest 942.00 in Westwood Short Duration on September 2, 2024 and sell it today you would earn a total of 80.00 from holding Westwood Short Duration or generate 8.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Asset Management vs. Westwood Short Duration
Performance |
| Timeline |
| Strategic Asset Mana |
| Westwood Short Duration |
Strategic Asset and Westwood Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Asset and Westwood Short
The main advantage of trading using opposite Strategic Asset and Westwood Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Asset position performs unexpectedly, Westwood Short 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 Westwood Short will offset losses from the drop in Westwood Short's long position.| Strategic Asset vs. Prudential Short Duration | Strategic Asset vs. Virtus High Yield | Strategic Asset vs. Artisan High Income | Strategic Asset vs. Pace High Yield |
| Westwood Short vs. Westwood Quality Value | Westwood Short vs. Westwood Largecap Value | Westwood Short vs. Westwood Quality Smidcap | Westwood Short vs. Westwood Smallcap Value |
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 Stocks Directory module to find actively traded stocks across global markets.
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