Correlation Between Western Asset and Resq Strategic
Can any of the company-specific risk be diversified away by investing in both Western Asset and Resq Strategic 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 Resq Strategic 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 Resq Strategic Income, you can compare the effects of market volatilities on Western Asset and Resq Strategic 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 Resq Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Resq Strategic.
Diversification Opportunities for Western Asset and Resq Strategic
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Resq is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Resq Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resq Strategic Income 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 Resq Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resq Strategic Income has no effect on the direction of Western Asset i.e., Western Asset and Resq Strategic go up and down completely randomly.
Pair Corralation between Western Asset and Resq Strategic
Assuming the 90 days horizon Western Asset Inflation is expected to generate 0.44 times more return on investment than Resq Strategic. However, Western Asset Inflation is 2.29 times less risky than Resq Strategic. It trades about 0.03 of its potential returns per unit of risk. Resq Strategic Income is currently generating about -0.01 per unit of risk. If you would invest 890.00 in Western Asset Inflation on September 14, 2024 and sell it today you would earn a total of 46.00 from holding Western Asset Inflation or generate 5.17% 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. Resq Strategic Income
Performance |
| Timeline |
| Western Asset Inflation |
| Resq Strategic Income |
Western Asset and Resq Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Resq Strategic
The main advantage of trading using opposite Western Asset and Resq Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Resq Strategic 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 Resq Strategic will offset losses from the drop in Resq Strategic's long position.| Western Asset vs. Goldman Sachs Clean | Western Asset vs. Short Precious Metals | Western Asset vs. Gold And Precious | Western Asset vs. Fidelity Advisor Gold |
| Resq Strategic vs. Gmo High Yield | Resq Strategic vs. Virtus High Yield | Resq Strategic vs. Guggenheim High Yield | Resq Strategic vs. Pax High Yield |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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