Correlation Between Origin Emerging and Western Asset
Can any of the company-specific risk be diversified away by investing in both Origin Emerging 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 Origin Emerging and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Emerging Markets and Western Asset Inflation, you can compare the effects of market volatilities on Origin Emerging 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 Origin Emerging with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Emerging and Western Asset.
Diversification Opportunities for Origin Emerging and Western Asset
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Origin and WESTERN is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Origin Emerging Markets 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 Origin Emerging 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 Origin Emerging Markets 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 Origin Emerging i.e., Origin Emerging and Western Asset go up and down completely randomly.
Pair Corralation between Origin Emerging and Western Asset
Assuming the 90 days horizon Origin Emerging Markets is expected to under-perform the Western Asset. But the mutual fund apears to be less risky and, when comparing its historical volatility, Origin Emerging Markets is 5.63 times less risky than Western Asset. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Western Asset Inflation is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 919.00 in Western Asset Inflation on October 25, 2024 and sell it today you would earn a total of 3.00 from holding Western Asset Inflation or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.22% |
| Values | Daily Returns |
Origin Emerging Markets vs. Western Asset Inflation
Performance |
| Timeline |
| Origin Emerging Markets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Western Asset Inflation |
Origin Emerging and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Emerging and Western Asset
The main advantage of trading using opposite Origin Emerging and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Emerging 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.| Origin Emerging vs. Payden Government Fund | Origin Emerging vs. Us Government Securities | Origin Emerging vs. Intermediate Government Bond | Origin Emerging vs. Franklin Adjustable Government |
| Western Asset vs. Allianzgi Diversified Income | Western Asset vs. Principal Lifetime Hybrid | Western Asset vs. Stone Ridge Diversified | Western Asset vs. Tax Managed Mid Small |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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