Correlation Between Western Asset and Victory Incore
Can any of the company-specific risk be diversified away by investing in both Western Asset and Victory Incore 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 Victory Incore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Municipal and Victory Incore Investment, you can compare the effects of market volatilities on Western Asset and Victory Incore 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 Victory Incore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Victory Incore.
Diversification Opportunities for Western Asset and Victory Incore
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Victory is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Victory Incore Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Incore Investment 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 Municipal are associated (or correlated) with Victory Incore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Incore Investment has no effect on the direction of Western Asset i.e., Western Asset and Victory Incore go up and down completely randomly.
Pair Corralation between Western Asset and Victory Incore
Assuming the 90 days horizon Western Asset Municipal is expected to generate 0.58 times more return on investment than Victory Incore. However, Western Asset Municipal is 1.73 times less risky than Victory Incore. It trades about -0.36 of its potential returns per unit of risk. Victory Incore Investment is currently generating about -0.23 per unit of risk. If you would invest 1,316 in Western Asset Municipal on October 9, 2024 and sell it today you would lose (24.00) from holding Western Asset Municipal or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Victory Incore Investment
Performance |
| Timeline |
| Western Asset Municipal |
| Victory Incore Investment |
Western Asset and Victory Incore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Victory Incore
The main advantage of trading using opposite Western Asset and Victory Incore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Victory Incore 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 Victory Incore will offset losses from the drop in Victory Incore's long position.| Western Asset vs. Franklin Mutual Beacon | Western Asset vs. Templeton Developing Markets | Western Asset vs. Franklin Mutual Global | Western Asset vs. Franklin Mutual Global |
| Victory Incore vs. Ultra Short Fixed Income | Victory Incore vs. Angel Oak Ultrashort | Victory Incore vs. Transam Short Term Bond | Victory Incore vs. Aamhimco Short Duration |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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