Correlation Between Western Asset and Miller Intermediate
Can any of the company-specific risk be diversified away by investing in both Western Asset and Miller Intermediate 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 Miller Intermediate 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 Miller Intermediate Bond, you can compare the effects of market volatilities on Western Asset and Miller Intermediate 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 Miller Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Miller Intermediate.
Diversification Opportunities for Western Asset and Miller Intermediate
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Miller is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Miller Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miller Intermediate Bond 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 Miller Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miller Intermediate Bond has no effect on the direction of Western Asset i.e., Western Asset and Miller Intermediate go up and down completely randomly.
Pair Corralation between Western Asset and Miller Intermediate
Assuming the 90 days horizon Western Asset is expected to generate 5.92 times less return on investment than Miller Intermediate. But when comparing it to its historical volatility, Western Asset Inflation is 1.16 times less risky than Miller Intermediate. It trades about 0.06 of its potential returns per unit of risk. Miller Intermediate Bond is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,676 in Miller Intermediate Bond on September 1, 2024 and sell it today you would earn a total of 73.00 from holding Miller Intermediate Bond or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Asset Inflation vs. Miller Intermediate Bond
Performance |
| Timeline |
| Western Asset Inflation |
| Miller Intermediate Bond |
Western Asset and Miller Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Miller Intermediate
The main advantage of trading using opposite Western Asset and Miller Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Miller Intermediate 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 Miller Intermediate will offset losses from the drop in Miller Intermediate's long position.| Western Asset vs. Iaadx | Western Asset vs. Abr 7525 Volatility | Western Asset vs. Ab Value Fund | Western Asset vs. Bbh Partner Fund |
| Miller Intermediate vs. Miller Market Neutral | Miller Intermediate vs. Miller Vertible Bond | Miller Intermediate vs. Miller Vertible Bond | Miller Intermediate vs. Miller Vertible Bond |
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 Stocks Directory module to find actively traded stocks across global markets.
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