Correlation Between Western Asset and Baird Intermediate
Can any of the company-specific risk be diversified away by investing in both Western Asset and Baird Intermediate 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 Baird Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset High and Baird Intermediate Bond, you can compare the effects of market volatilities on Western Asset and Baird Intermediate 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 Baird Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Baird Intermediate.
Diversification Opportunities for Western Asset and Baird Intermediate
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Baird is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Baird Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Intermediate Bond 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 High are associated (or correlated) with Baird Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Intermediate Bond has no effect on the direction of Western Asset i.e., Western Asset and Baird Intermediate go up and down completely randomly.
Pair Corralation between Western Asset and Baird Intermediate
Assuming the 90 days horizon Western Asset High is expected to generate 1.1 times more return on investment than Baird Intermediate. However, Western Asset is 1.1 times more volatile than Baird Intermediate Bond. It trades about 0.18 of its potential returns per unit of risk. Baird Intermediate Bond is currently generating about 0.1 per unit of risk. If you would invest 634.00 in Western Asset High on September 2, 2024 and sell it today you would earn a total of 74.00 from holding Western Asset High or generate 11.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset High vs. Baird Intermediate Bond
Performance |
| Timeline |
| Western Asset High |
| Baird Intermediate Bond |
Western Asset and Baird Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Baird Intermediate
The main advantage of trading using opposite Western Asset and Baird Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Baird Intermediate 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 Baird Intermediate will offset losses from the drop in Baird Intermediate's long position.| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
| Baird Intermediate vs. Metropolitan West Total | Baird Intermediate vs. Mfs Emerging Markets | Baird Intermediate vs. Jpmorgan E Bond | Baird Intermediate vs. Eaton Vance Income |
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 Stocks Directory module to find actively traded stocks across global markets.
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