Correlation Between Pioneer Floating and Western Asset
Can any of the company-specific risk be diversified away by investing in both Pioneer Floating 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 Pioneer Floating and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pioneer Floating Rate and Western Asset High, you can compare the effects of market volatilities on Pioneer Floating 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 Pioneer Floating with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Floating and Western Asset.
Diversification Opportunities for Pioneer Floating and Western Asset
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pioneer and Western is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Floating Rate 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 Pioneer Floating 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 Pioneer Floating Rate 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 Pioneer Floating i.e., Pioneer Floating and Western Asset go up and down completely randomly.
Pair Corralation between Pioneer Floating and Western Asset
Considering the 90-day investment horizon Pioneer Floating Rate is expected to generate 0.92 times more return on investment than Western Asset. However, Pioneer Floating Rate is 1.08 times less risky than Western Asset. It trades about 0.1 of its potential returns per unit of risk. Western Asset High is currently generating about 0.09 per unit of risk. If you would invest 890.00 in Pioneer Floating Rate on August 27, 2024 and sell it today you would earn a total of 92.00 from holding Pioneer Floating Rate or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pioneer Floating Rate vs. Western Asset High
Performance |
| Timeline |
| Pioneer Floating Rate |
| Western Asset High |
Pioneer Floating and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pioneer Floating and Western Asset
The main advantage of trading using opposite Pioneer Floating and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Floating 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.| Pioneer Floating vs. MFS High Income | Pioneer Floating vs. MFS Investment Grade | Pioneer Floating vs. Eaton Vance National | Pioneer Floating vs. Invesco High Income |
| Western Asset vs. Western Asset Global | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Western Asset High |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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