Correlation Between Inverse High and Western Asset
Can any of the company-specific risk be diversified away by investing in both Inverse High 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 Inverse High and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inverse High Yield and Western Asset High, you can compare the effects of market volatilities on Inverse High 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 Inverse High with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inverse High and Western Asset.
Diversification Opportunities for Inverse High and Western Asset
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inverse and Western is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Inverse High Yield 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 Inverse High 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 Inverse High Yield 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 Inverse High i.e., Inverse High and Western Asset go up and down completely randomly.
Pair Corralation between Inverse High and Western Asset
Assuming the 90 days horizon Inverse High Yield is expected to under-perform the Western Asset. In addition to that, Inverse High is 1.34 times more volatile than Western Asset High. It trades about -0.01 of its total potential returns per unit of risk. Western Asset High is currently generating about 0.1 per unit of volatility. If you would invest 603.00 in Western Asset High on October 29, 2024 and sell it today you would earn a total of 102.00 from holding Western Asset High or generate 16.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inverse High Yield vs. Western Asset High
Performance |
| Timeline |
| Inverse High Yield |
| Western Asset High |
Inverse High and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inverse High and Western Asset
The main advantage of trading using opposite Inverse High and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inverse High 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.| Inverse High vs. Fznopx | Inverse High vs. Fuhkbx | Inverse High vs. Tax Managed Large Cap | Inverse High vs. Astoncrosswind Small Cap |
| Western Asset vs. Virtus Multi Sector Short | Western Asset vs. Blackrock Global Longshort | Western Asset vs. Siit Ultra Short | Western Asset vs. Cmg Ultra Short |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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