Correlation Between Western Asset and Western Asset
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Western Asset 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 Western Asset Intermediate, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Western Asset.
Diversification Opportunities for Western Asset and Western Asset
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Western is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Managed and Western Asset Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Interm 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 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 Interm has no effect on the direction of Western Asset i.e., Western Asset and Western Asset go up and down completely randomly.
Pair Corralation between Western Asset and Western Asset
Assuming the 90 days horizon Western Asset Managed is expected to generate 1.61 times more return on investment than Western Asset. However, Western Asset is 1.61 times more volatile than Western Asset Intermediate. It trades about 0.13 of its potential returns per unit of risk. Western Asset Intermediate is currently generating about -0.13 per unit of risk. If you would invest 1,494 in Western Asset Managed on August 24, 2024 and sell it today you would earn a total of 15.00 from holding Western Asset Managed or generate 1.0% 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. Western Asset Intermediate
Performance |
| Timeline |
| Western Asset Managed |
| Western Asset Interm |
Western Asset and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Western Asset
The main advantage of trading using opposite Western Asset and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Financials Ultrasector Profund | Western Asset vs. Prudential Jennison Financial | Western Asset vs. Blackrock Financial Institutions | Western Asset vs. Transamerica Financial Life |
| Western Asset vs. Guggenheim Long Short | Western Asset vs. Astor Longshort Fund | Western Asset vs. Ultra Short Term Fixed | Western Asset vs. Old Westbury Short Term |
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.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |