Correlation Between Western Asset and Growth Fund
Can any of the company-specific risk be diversified away by investing in both Western Asset and Growth 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 Growth Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Premier and Growth Fund Of, you can compare the effects of market volatilities on Western Asset and Growth 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 Growth Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Growth Fund.
Diversification Opportunities for Western Asset and Growth Fund
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Growth is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Premier and Growth Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Fund 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 Premier are associated (or correlated) with Growth Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Fund has no effect on the direction of Western Asset i.e., Western Asset and Growth Fund go up and down completely randomly.
Pair Corralation between Western Asset and Growth Fund
If you would invest 7,921 in Growth Fund Of on August 30, 2024 and sell it today you would earn a total of 269.00 from holding Growth Fund Of or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Premier vs. Growth Fund Of
Performance |
| Timeline |
| Western Asset Premier |
| Growth Fund |
Western Asset and Growth Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Growth Fund
The main advantage of trading using opposite Western Asset and Growth Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Growth 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 Growth Fund will offset losses from the drop in Growth Fund's long position.| Western Asset vs. Angel Oak Multi Strategy | Western Asset vs. T Rowe Price | Western Asset vs. Dodge Cox Emerging | Western Asset vs. T Rowe Price |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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