Correlation Between Swiss Helvetia and Western Asset
Can any of the company-specific risk be diversified away by investing in both Swiss Helvetia 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 Swiss Helvetia and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Helvetia Closed and Western Asset Managed, you can compare the effects of market volatilities on Swiss Helvetia 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 Swiss Helvetia with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Helvetia and Western Asset.
Diversification Opportunities for Swiss Helvetia and Western Asset
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Swiss and Western is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Helvetia Closed 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 Swiss Helvetia 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 Swiss Helvetia Closed 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 Swiss Helvetia i.e., Swiss Helvetia and Western Asset go up and down completely randomly.
Pair Corralation between Swiss Helvetia and Western Asset
Considering the 90-day investment horizon Swiss Helvetia Closed is expected to under-perform the Western Asset. In addition to that, Swiss Helvetia is 1.55 times more volatile than Western Asset Managed. It trades about -0.36 of its total potential returns per unit of risk. Western Asset Managed is currently generating about -0.02 per unit of volatility. If you would invest 1,046 in Western Asset Managed on August 24, 2024 and sell it today you would lose (3.00) from holding Western Asset Managed or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Helvetia Closed vs. Western Asset Managed
Performance |
| Timeline |
| Swiss Helvetia Closed |
| Western Asset Managed |
Swiss Helvetia and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Helvetia and Western Asset
The main advantage of trading using opposite Swiss Helvetia and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Helvetia 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.| Swiss Helvetia vs. MFS Investment Grade | Swiss Helvetia vs. Eaton Vance National | Swiss Helvetia vs. Blackrock Muniyield Quality | Swiss Helvetia vs. Munivest Fund |
| Western Asset vs. MFS Investment Grade | Western Asset vs. Eaton Vance National | Western Asset vs. Blackrock Muniyield Quality | Western Asset vs. Munivest Fund |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |