Correlation Between Western Asset and Volumetric Fund
Can any of the company-specific risk be diversified away by investing in both Western Asset and Volumetric Fund 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 Volumetric Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset E and Volumetric Fund Volumetric, you can compare the effects of market volatilities on Western Asset and Volumetric Fund 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 Volumetric Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Volumetric Fund.
Diversification Opportunities for Western Asset and Volumetric Fund
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Volumetric is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset E and Volumetric Fund Volumetric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volumetric Fund Volu 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 E are associated (or correlated) with Volumetric Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volumetric Fund Volu has no effect on the direction of Western Asset i.e., Western Asset and Volumetric Fund go up and down completely randomly.
Pair Corralation between Western Asset and Volumetric Fund
Assuming the 90 days horizon Western Asset E is expected to generate 0.19 times more return on investment than Volumetric Fund. However, Western Asset E is 5.3 times less risky than Volumetric Fund. It trades about 0.11 of its potential returns per unit of risk. Volumetric Fund Volumetric is currently generating about -0.09 per unit of risk. If you would invest 904.00 in Western Asset E on October 24, 2024 and sell it today you would earn a total of 6.00 from holding Western Asset E or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset E vs. Volumetric Fund Volumetric
Performance |
| Timeline |
| Western Asset E |
| Volumetric Fund Volu |
Western Asset and Volumetric Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Volumetric Fund
The main advantage of trading using opposite Western Asset and Volumetric Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Volumetric Fund 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 Volumetric Fund will offset losses from the drop in Volumetric Fund's long position.| Western Asset vs. Thrivent Natural Resources | Western Asset vs. Cohen Steers Mlp | Western Asset vs. Invesco Energy Fund | Western Asset vs. Environment And Alternative |
| Volumetric Fund vs. The Texas Fund | Volumetric Fund vs. Small Cap Stock | Volumetric Fund vs. Western Asset E | Volumetric Fund vs. Nasdaq 100 Profund Nasdaq 100 |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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