Correlation Between Western Asset and Deutsche Global
Can any of the company-specific risk be diversified away by investing in both Western Asset and Deutsche Global 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 Deutsche Global 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 Deutsche Global Inflation, you can compare the effects of market volatilities on Western Asset and Deutsche Global 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 Deutsche Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Deutsche Global.
Diversification Opportunities for Western Asset and Deutsche Global
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Deutsche is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Deutsche Global Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Global Inflation 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 Deutsche Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Global Inflation has no effect on the direction of Western Asset i.e., Western Asset and Deutsche Global go up and down completely randomly.
Pair Corralation between Western Asset and Deutsche Global
Assuming the 90 days horizon Western Asset is expected to generate 1.12 times less return on investment than Deutsche Global. In addition to that, Western Asset is 1.13 times more volatile than Deutsche Global Inflation. It trades about 0.07 of its total potential returns per unit of risk. Deutsche Global Inflation is currently generating about 0.09 per unit of volatility. If you would invest 929.00 in Deutsche Global Inflation on August 24, 2024 and sell it today you would earn a total of 29.00 from holding Deutsche Global Inflation or generate 3.12% 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. Deutsche Global Inflation
Performance |
| Timeline |
| Western Asset Inflation |
| Deutsche Global Inflation |
Western Asset and Deutsche Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Deutsche Global
The main advantage of trading using opposite Western Asset and Deutsche Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Deutsche Global 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 Deutsche Global will offset losses from the drop in Deutsche Global's long position.| Western Asset vs. Ab Bond Inflation | Western Asset vs. Fidelity Sai Inflationfocused | Western Asset vs. Simt Multi Asset Inflation | Western Asset vs. Tiaa Cref Inflation Linked Bond |
| Deutsche Global vs. Touchstone Premium Yield | Deutsche Global vs. Alliancebernstein Bond | Deutsche Global vs. Multisector Bond Sma | Deutsche Global vs. Bbh Intermediate Municipal |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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