Correlation Between Western Asset and Catholic Values
Can any of the company-specific risk be diversified away by investing in both Western Asset and Catholic Values 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 Catholic Values 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 Catholic Values Fixed, you can compare the effects of market volatilities on Western Asset and Catholic Values 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 Catholic Values. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Catholic Values.
Diversification Opportunities for Western Asset and Catholic Values
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Catholic is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Catholic Values Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catholic Values Fixed 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 Catholic Values. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catholic Values Fixed has no effect on the direction of Western Asset i.e., Western Asset and Catholic Values go up and down completely randomly.
Pair Corralation between Western Asset and Catholic Values
Assuming the 90 days horizon Western Asset is expected to generate 1.24 times less return on investment than Catholic Values. But when comparing it to its historical volatility, Western Asset Inflation is 1.08 times less risky than Catholic Values. It trades about 0.02 of its potential returns per unit of risk. Catholic Values Fixed is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 831.00 in Catholic Values Fixed on September 4, 2024 and sell it today you would earn a total of 39.00 from holding Catholic Values Fixed or generate 4.69% 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. Catholic Values Fixed
Performance |
| Timeline |
| Western Asset Inflation |
| Catholic Values Fixed |
Western Asset and Catholic Values Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Catholic Values
The main advantage of trading using opposite Western Asset and Catholic Values positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Catholic Values 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 Catholic Values will offset losses from the drop in Catholic Values' long position.| Western Asset vs. Ab Small Cap | Western Asset vs. Commonwealth Global Fund | Western Asset vs. Growth Strategy Fund | Western Asset vs. T Rowe Price |
| Catholic Values vs. T Rowe Price | Catholic Values vs. T Rowe Price | Catholic Values vs. Jp Morgan Smartretirement | Catholic Values vs. T Rowe Price |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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