Correlation Between Western Asset and Bts Managed
Can any of the company-specific risk be diversified away by investing in both Western Asset and Bts Managed 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 Bts Managed 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 Bts Managed Income, you can compare the effects of market volatilities on Western Asset and Bts Managed 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 Bts Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Bts Managed.
Diversification Opportunities for Western Asset and Bts Managed
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Bts is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Bts Managed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bts Managed Income 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 Bts Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bts Managed Income has no effect on the direction of Western Asset i.e., Western Asset and Bts Managed go up and down completely randomly.
Pair Corralation between Western Asset and Bts Managed
Assuming the 90 days horizon Western Asset is expected to generate 2.23 times less return on investment than Bts Managed. In addition to that, Western Asset is 1.56 times more volatile than Bts Managed Income. It trades about 0.15 of its total potential returns per unit of risk. Bts Managed Income is currently generating about 0.52 per unit of volatility. If you would invest 963.00 in Bts Managed Income on September 2, 2024 and sell it today you would earn a total of 21.00 from holding Bts Managed Income or generate 2.18% 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 Inflation vs. Bts Managed Income
Performance |
| Timeline |
| Western Asset Inflation |
| Bts Managed Income |
Western Asset and Bts Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Bts Managed
The main advantage of trading using opposite Western Asset and Bts Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Bts Managed 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 Bts Managed will offset losses from the drop in Bts Managed's long position.| Western Asset vs. Rbc Global Opportunities | Western Asset vs. T Rowe Price | Western Asset vs. Barings Global Floating | Western Asset vs. Wisdomtree Siegel Global |
| Bts Managed vs. Oklahoma College Savings | Bts Managed vs. Western Asset Inflation | Bts Managed vs. Cref Inflation Linked Bond | Bts Managed vs. American Funds Inflation |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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