Correlation Between Western Asset and Dfa Us
Can any of the company-specific risk be diversified away by investing in both Western Asset and Dfa Us 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 Dfa Us 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 Dfa Sustainability Targeted, you can compare the effects of market volatilities on Western Asset and Dfa Us 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 Dfa Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Dfa Us.
Diversification Opportunities for Western Asset and Dfa Us
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Dfa is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Dfa Sustainability Targeted in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Sustainability 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 Dfa Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Sustainability has no effect on the direction of Western Asset i.e., Western Asset and Dfa Us go up and down completely randomly.
Pair Corralation between Western Asset and Dfa Us
Assuming the 90 days horizon Western Asset is expected to generate 8.88 times less return on investment than Dfa Us. But when comparing it to its historical volatility, Western Asset Inflation is 3.12 times less risky than Dfa Us. It trades about 0.02 of its potential returns per unit of risk. Dfa Sustainability Targeted is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,554 in Dfa Sustainability Targeted on September 4, 2024 and sell it today you would earn a total of 576.00 from holding Dfa Sustainability Targeted or generate 37.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Inflation vs. Dfa Sustainability Targeted
Performance |
| Timeline |
| Western Asset Inflation |
| Dfa Sustainability |
Western Asset and Dfa Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Dfa Us
The main advantage of trading using opposite Western Asset and Dfa Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Dfa Us 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 Dfa Us will offset losses from the drop in Dfa Us' 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 |
| Dfa Us vs. Aqr Managed Futures | Dfa Us vs. Western Asset Inflation | Dfa Us vs. Arrow Managed Futures | Dfa Us vs. Goldman Sachs Managed |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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