Correlation Between Equity Growth and Western Asset
Can any of the company-specific risk be diversified away by investing in both Equity Growth 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 Equity Growth and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Growth Strategy and Western Asset Diversified, you can compare the effects of market volatilities on Equity Growth 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 Equity Growth with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Growth and Western Asset.
Diversification Opportunities for Equity Growth and Western Asset
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Equity and Western is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Equity Growth Strategy and Western Asset Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Diversified and Equity Growth 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 Equity Growth Strategy 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 Diversified has no effect on the direction of Equity Growth i.e., Equity Growth and Western Asset go up and down completely randomly.
Pair Corralation between Equity Growth and Western Asset
If you would invest 1,520 in Western Asset Diversified on November 27, 2024 and sell it today you would earn a total of 2.00 from holding Western Asset Diversified or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Equity Growth Strategy vs. Western Asset Diversified
Performance |
| Timeline |
| Equity Growth Strategy |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Western Asset Diversified |
Equity Growth and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Growth and Western Asset
The main advantage of trading using opposite Equity Growth and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Growth 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.| Equity Growth vs. Buffalo High Yield | Equity Growth vs. Intal High Relative | Equity Growth vs. T Rowe Price | Equity Growth vs. Versatile Bond Portfolio |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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