Correlation Between Western Asset and Brandywineglobal
Can any of the company-specific risk be diversified away by investing in both Western Asset and Brandywineglobal 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 Brandywineglobal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Total and Brandywineglobal High, you can compare the effects of market volatilities on Western Asset and Brandywineglobal 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 Brandywineglobal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Brandywineglobal.
Diversification Opportunities for Western Asset and Brandywineglobal
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Brandywineglobal is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Total and Brandywineglobal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandywineglobal High 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 Total are associated (or correlated) with Brandywineglobal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandywineglobal High has no effect on the direction of Western Asset i.e., Western Asset and Brandywineglobal go up and down completely randomly.
Pair Corralation between Western Asset and Brandywineglobal
Assuming the 90 days horizon Western Asset Total is expected to generate 1.09 times more return on investment than Brandywineglobal. However, Western Asset is 1.09 times more volatile than Brandywineglobal High. It trades about 0.36 of its potential returns per unit of risk. Brandywineglobal High is currently generating about -0.25 per unit of risk. If you would invest 907.00 in Western Asset Total on December 13, 2024 and sell it today you would earn a total of 11.00 from holding Western Asset Total or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Total vs. Brandywineglobal High
Performance |
| Timeline |
| Western Asset Total |
| Brandywineglobal High |
Western Asset and Brandywineglobal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Brandywineglobal
The main advantage of trading using opposite Western Asset and Brandywineglobal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Brandywineglobal 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 Brandywineglobal will offset losses from the drop in Brandywineglobal's long position.| Western Asset vs. Hennessy Bp Energy | ||
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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