Correlation Between Western Asset and Europe 125x
Can any of the company-specific risk be diversified away by investing in both Western Asset and Europe 125x 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 Europe 125x 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 Europe 125x Strategy, you can compare the effects of market volatilities on Western Asset and Europe 125x 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 Europe 125x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Europe 125x.
Diversification Opportunities for Western Asset and Europe 125x
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WESTERN and Europe is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Europe 125x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europe 125x Strategy 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 Europe 125x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europe 125x Strategy has no effect on the direction of Western Asset i.e., Western Asset and Europe 125x go up and down completely randomly.
Pair Corralation between Western Asset and Europe 125x
Assuming the 90 days horizon Western Asset Inflation is expected to generate 0.26 times more return on investment than Europe 125x. However, Western Asset Inflation is 3.84 times less risky than Europe 125x. It trades about -0.12 of its potential returns per unit of risk. Europe 125x Strategy is currently generating about -0.3 per unit of risk. If you would invest 938.00 in Western Asset Inflation on August 24, 2024 and sell it today you would lose (7.00) from holding Western Asset Inflation or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Inflation vs. Europe 125x Strategy
Performance |
| Timeline |
| Western Asset Inflation |
| Europe 125x Strategy |
Western Asset and Europe 125x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Europe 125x
The main advantage of trading using opposite Western Asset and Europe 125x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Europe 125x 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 Europe 125x will offset losses from the drop in Europe 125x's long position.| Western Asset vs. Vanguard Inflation Protected Securities | Western Asset vs. Vanguard Inflation Protected Securities | Western Asset vs. American Funds Inflation | Western Asset vs. American Funds Inflation |
| Europe 125x vs. Loomis Sayles Inflation | Europe 125x vs. Vy Blackrock Inflation | Europe 125x vs. Western Asset Inflation | Europe 125x vs. Aqr Managed Futures |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |