Correlation Between Western Asset and Blackrock Inflation
Can any of the company-specific risk be diversified away by investing in both Western Asset and Blackrock Inflation 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 Blackrock Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Inflation and Blackrock Inflation Protected, you can compare the effects of market volatilities on Western Asset and Blackrock Inflation 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 Blackrock Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Blackrock Inflation.
Diversification Opportunities for Western Asset and Blackrock Inflation
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between WESTERN and Blackrock is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Blackrock Inflation Protected in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Inflation 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 Inflation are associated (or correlated) with Blackrock Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Inflation has no effect on the direction of Western Asset i.e., Western Asset and Blackrock Inflation go up and down completely randomly.
Pair Corralation between Western Asset and Blackrock Inflation
Assuming the 90 days horizon Western Asset Inflation is expected to under-perform the Blackrock Inflation. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Inflation is 1.05 times less risky than Blackrock Inflation. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Blackrock Inflation Protected is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 974.00 in Blackrock Inflation Protected on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Blackrock Inflation Protected or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Inflation vs. Blackrock Inflation Protected
Performance |
| Timeline |
| Western Asset Inflation |
| Blackrock Inflation |
Western Asset and Blackrock Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Blackrock Inflation
The main advantage of trading using opposite Western Asset and Blackrock Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Blackrock Inflation 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 Blackrock Inflation will offset losses from the drop in Blackrock Inflation's long position.| Western Asset vs. Invesco Technology Fund | Western Asset vs. Mfs Technology Fund | Western Asset vs. Hennessy Technology Fund | Western Asset vs. Columbia Global Technology |
| Blackrock Inflation vs. Blackrock California Municipal | Blackrock Inflation vs. Blackrock Balanced Capital | Blackrock Inflation vs. Blackrock Eurofund Class | Blackrock Inflation vs. Blackrock Funds |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |