Correlation Between Western Asset and Guggenheim Limited
Can any of the company-specific risk be diversified away by investing in both Western Asset and Guggenheim Limited 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 Guggenheim Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Managed and Guggenheim Limited Duration, you can compare the effects of market volatilities on Western Asset and Guggenheim Limited 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 Guggenheim Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Guggenheim Limited.
Diversification Opportunities for Western Asset and Guggenheim Limited
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Guggenheim is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Managed and Guggenheim Limited Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Limited 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 Managed are associated (or correlated) with Guggenheim Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Limited has no effect on the direction of Western Asset i.e., Western Asset and Guggenheim Limited go up and down completely randomly.
Pair Corralation between Western Asset and Guggenheim Limited
Assuming the 90 days horizon Western Asset is expected to generate 1.43 times less return on investment than Guggenheim Limited. In addition to that, Western Asset is 2.59 times more volatile than Guggenheim Limited Duration. It trades about 0.01 of its total potential returns per unit of risk. Guggenheim Limited Duration is currently generating about 0.02 per unit of volatility. If you would invest 2,445 in Guggenheim Limited Duration on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Guggenheim Limited Duration or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Managed vs. Guggenheim Limited Duration
Performance |
| Timeline |
| Western Asset Managed |
| Guggenheim Limited |
Western Asset and Guggenheim Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Guggenheim Limited
The main advantage of trading using opposite Western Asset and Guggenheim Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Guggenheim Limited 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 Guggenheim Limited will offset losses from the drop in Guggenheim Limited's long position.| Western Asset vs. Diversified Municipal Portfolio | Western Asset vs. Western Asset Managed | Western Asset vs. Western Asset Managed | Western Asset vs. Nuveen High Yield |
| Guggenheim Limited vs. Guggenheim Macro Opportunities | Guggenheim Limited vs. Guggenheim Total Return | Guggenheim Limited vs. Guggenheim Floating Rate | Guggenheim Limited vs. Lord Abbett 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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