Correlation Between Western Asset and Locorr Market
Can any of the company-specific risk be diversified away by investing in both Western Asset and Locorr Market 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 Western Asset and Locorr Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset New and Locorr Market Trend, you can compare the effects of market volatilities on Western Asset and Locorr Market 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 Western Asset with a short position of Locorr Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Locorr Market.
Diversification Opportunities for Western Asset and Locorr Market
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Locorr is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset New and Locorr Market Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Market Trend and Western Asset 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 Western Asset New are associated (or correlated) with Locorr Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Market Trend has no effect on the direction of Western Asset i.e., Western Asset and Locorr Market go up and down completely randomly.
Pair Corralation between Western Asset and Locorr Market
Assuming the 90 days horizon Western Asset New is expected to generate 0.28 times more return on investment than Locorr Market. However, Western Asset New is 3.6 times less risky than Locorr Market. It trades about 0.06 of its potential returns per unit of risk. Locorr Market Trend is currently generating about -0.01 per unit of risk. If you would invest 1,131 in Western Asset New on September 5, 2024 and sell it today you would earn a total of 82.00 from holding Western Asset New or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Western Asset New vs. Locorr Market Trend
Performance |
| Timeline |
| Western Asset New |
| Locorr Market Trend |
Western Asset and Locorr Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Locorr Market
The main advantage of trading using opposite Western Asset and Locorr Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Locorr Market 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 Locorr Market will offset losses from the drop in Locorr Market's long position.| Western Asset vs. Locorr Market Trend | Western Asset vs. Templeton Developing Markets | Western Asset vs. Massmutual Select Diversified | Western Asset vs. Artisan Emerging Markets |
| Locorr Market vs. Hartford Healthcare Hls | Locorr Market vs. The Gabelli Healthcare | Locorr Market vs. Baron Health Care | Locorr Market vs. Putnam Global Health |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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