Correlation Between Aig Government and Western Asset
Can any of the company-specific risk be diversified away by investing in both Aig Government 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 Aig Government and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aig Government Money and Western Asset Managed, you can compare the effects of market volatilities on Aig Government 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 Aig Government with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Western Asset.
Diversification Opportunities for Aig Government and Western Asset
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aig and Western is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Western Asset Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Managed and Aig Government 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 Aig Government Money 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 Managed has no effect on the direction of Aig Government i.e., Aig Government and Western Asset go up and down completely randomly.
Pair Corralation between Aig Government and Western Asset
Assuming the 90 days horizon Aig Government is expected to generate 1.2 times less return on investment than Western Asset. But when comparing it to its historical volatility, Aig Government Money is 1.22 times less risky than Western Asset. It trades about 0.14 of its potential returns per unit of risk. Western Asset Managed is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,465 in Western Asset Managed on September 1, 2024 and sell it today you would earn a total of 58.00 from holding Western Asset Managed or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Aig Government Money vs. Western Asset Managed
Performance |
| Timeline |
| Aig Government Money |
| Western Asset Managed |
Aig Government and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Western Asset
The main advantage of trading using opposite Aig Government and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government 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.| Aig Government vs. Prudential Health Sciences | Aig Government vs. Health Biotchnology Portfolio | Aig Government vs. Baillie Gifford Health | Aig Government vs. Baron Health Care |
| Western Asset vs. Virtus Convertible | Western Asset vs. Harbor Vertible Securities | Western Asset vs. Absolute Convertible Arbitrage | Western Asset vs. Putnam Convertible Incm Gwth |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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