Correlation Between Western Asset and Scharf Global
Can any of the company-specific risk be diversified away by investing in both Western Asset and Scharf Global 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 Scharf Global 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 Scharf Global Opportunity, you can compare the effects of market volatilities on Western Asset and Scharf Global 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 Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Scharf Global.
Diversification Opportunities for Western Asset and Scharf Global
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Scharf is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset E and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity 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 Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Western Asset i.e., Western Asset and Scharf Global go up and down completely randomly.
Pair Corralation between Western Asset and Scharf Global
Assuming the 90 days horizon Western Asset is expected to generate 4.17 times less return on investment than Scharf Global. But when comparing it to its historical volatility, Western Asset E is 1.43 times less risky than Scharf Global. It trades about 0.03 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,008 in Scharf Global Opportunity on September 2, 2024 and sell it today you would earn a total of 821.00 from holding Scharf Global Opportunity or generate 27.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset E vs. Scharf Global Opportunity
Performance |
| Timeline |
| Western Asset E |
| Scharf Global Opportunity |
Western Asset and Scharf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Scharf Global
The main advantage of trading using opposite Western Asset and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Scharf Global 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 Scharf Global will offset losses from the drop in Scharf Global's long position.| Western Asset vs. Scharf Global Opportunity | Western Asset vs. Blue Current Global | Western Asset vs. T Rowe Price | Western Asset vs. Wisdomtree Siegel Global |
| Scharf Global vs. Scharf Balanced Opportunity | Scharf Global vs. Scharf Fund Retail | Scharf Global vs. Scharf Balanced Opportunity | Scharf Global vs. Virtus Allianzgi Artificial |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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