Correlation Between Western Asset and Western Asset
Can any of the company-specific risk be diversified away by investing in both Western Asset and Western Asset 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 Western Asset 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 Western Asset E, you can compare the effects of market volatilities on Western Asset and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Western Asset.
Diversification Opportunities for Western Asset and Western Asset
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Western is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset E has no effect on the direction of Western Asset i.e., Western Asset and Western Asset go up and down completely randomly.
Pair Corralation between Western Asset and Western Asset
Assuming the 90 days horizon Western Asset is expected to generate 2.22 times less return on investment than Western Asset. But when comparing it to its historical volatility, Western Asset Inflation is 1.27 times less risky than Western Asset. It trades about 0.01 of its potential returns per unit of risk. Western Asset E is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 887.00 in Western Asset E on August 27, 2024 and sell it today you would earn a total of 33.00 from holding Western Asset E or generate 3.72% 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. Western Asset E
Performance |
| Timeline |
| Western Asset Inflation |
| Western Asset E |
Western Asset and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Western Asset
The main advantage of trading using opposite Western Asset and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Western Asset vs. Omni Small Cap Value | Western Asset vs. Materials Portfolio Fidelity | Western Asset vs. Vanguard Strategic Small Cap | Western Asset vs. Ab E Opportunities |
| Western Asset vs. Fidelity Capital Income | Western Asset vs. Siit High Yield | Western Asset vs. Dunham High Yield | Western Asset vs. Pace 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |