Correlation Between Western Asset and Invesco Peak
Can any of the company-specific risk be diversified away by investing in both Western Asset and Invesco Peak 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 Invesco Peak 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 Invesco Peak Retirement, you can compare the effects of market volatilities on Western Asset and Invesco Peak 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 Invesco Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Invesco Peak.
Diversification Opportunities for Western Asset and Invesco Peak
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Invesco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Invesco Peak Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Peak Retirement 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 Invesco Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Peak Retirement has no effect on the direction of Western Asset i.e., Western Asset and Invesco Peak go up and down completely randomly.
Pair Corralation between Western Asset and Invesco Peak
Assuming the 90 days horizon Western Asset Inflation is expected to generate 0.88 times more return on investment than Invesco Peak. However, Western Asset Inflation is 1.14 times less risky than Invesco Peak. It trades about 0.02 of its potential returns per unit of risk. Invesco Peak Retirement is currently generating about -0.21 per unit of risk. If you would invest 908.00 in Western Asset Inflation on September 3, 2024 and sell it today you would earn a total of 33.00 from holding Western Asset Inflation or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 7.27% |
| Values | Daily Returns |
Western Asset Inflation vs. Invesco Peak Retirement
Performance |
| Timeline |
| Western Asset Inflation |
| Invesco Peak Retirement |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Asset and Invesco Peak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Invesco Peak
The main advantage of trading using opposite Western Asset and Invesco Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Invesco Peak 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 Invesco Peak will offset losses from the drop in Invesco Peak's long position.| Western Asset vs. Blackrock Sm Cap | Western Asset vs. Principal Lifetime Hybrid | Western Asset vs. Adams Diversified Equity | Western Asset vs. Lord Abbett Diversified |
| Invesco Peak vs. Invesco Technology Fund | Invesco Peak vs. Biotechnology Ultrasector Profund | Invesco Peak vs. Dreyfus Technology Growth | Invesco Peak vs. Vanguard Information Technology |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |