Correlation Between Spirit Of and Western Asset
Can any of the company-specific risk be diversified away by investing in both Spirit Of 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 Spirit Of and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirit Of America and Western Asset Municipal, you can compare the effects of market volatilities on Spirit Of 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 Spirit Of with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirit Of and Western Asset.
Diversification Opportunities for Spirit Of and Western Asset
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Spirit and Western is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Spirit Of America and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal and Spirit Of 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 Spirit Of America 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 Municipal has no effect on the direction of Spirit Of i.e., Spirit Of and Western Asset go up and down completely randomly.
Pair Corralation between Spirit Of and Western Asset
If you would invest 724.00 in Western Asset Municipal on September 4, 2024 and sell it today you would earn a total of 7.00 from holding Western Asset Municipal or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.41% |
| Values | Daily Returns |
Spirit Of America vs. Western Asset Municipal
Performance |
| Timeline |
| Spirit Of America |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Western Asset Municipal |
Spirit Of and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirit Of and Western Asset
The main advantage of trading using opposite Spirit Of and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirit Of 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.| Spirit Of vs. Federated Pennsylvania Municipal | Spirit Of vs. Morningstar Municipal Bond | Spirit Of vs. Transamerica Funds | Spirit Of vs. Ishares Municipal Bond |
| Western Asset vs. Icon Natural Resources | Western Asset vs. Invesco Energy Fund | Western Asset vs. Dreyfus Natural Resources | Western Asset vs. Gmo Resources |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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