Correlation Between Western Asset and Amg Gwk
Can any of the company-specific risk be diversified away by investing in both Western Asset and Amg Gwk 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 Amg Gwk 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 Amg Gwk Smallmid, you can compare the effects of market volatilities on Western Asset and Amg Gwk 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 Amg Gwk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Amg Gwk.
Diversification Opportunities for Western Asset and Amg Gwk
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Amg is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Amg Gwk Smallmid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk Smallmid 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 Amg Gwk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Gwk Smallmid has no effect on the direction of Western Asset i.e., Western Asset and Amg Gwk go up and down completely randomly.
Pair Corralation between Western Asset and Amg Gwk
Assuming the 90 days horizon Western Asset Inflation is expected to generate 0.34 times more return on investment than Amg Gwk. However, Western Asset Inflation is 2.98 times less risky than Amg Gwk. It trades about 0.05 of its potential returns per unit of risk. Amg Gwk Smallmid is currently generating about -0.04 per unit of risk. If you would invest 938.00 in Western Asset Inflation on September 12, 2024 and sell it today you would earn a total of 3.00 from holding Western Asset Inflation or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Asset Inflation vs. Amg Gwk Smallmid
Performance |
| Timeline |
| Western Asset Inflation |
| Amg Gwk Smallmid |
Western Asset and Amg Gwk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Amg Gwk
The main advantage of trading using opposite Western Asset and Amg Gwk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Amg Gwk 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 Amg Gwk will offset losses from the drop in Amg Gwk's long position.| Western Asset vs. Eventide Healthcare Life | Western Asset vs. Live Oak Health | Western Asset vs. Alger Health Sciences | Western Asset vs. Prudential Health Sciences |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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