Correlation Between Western Asset and Future Scholar
Can any of the company-specific risk be diversified away by investing in both Western Asset and Future Scholar 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 Future Scholar 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 Future Scholar 529, you can compare the effects of market volatilities on Western Asset and Future Scholar 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 Future Scholar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Future Scholar.
Diversification Opportunities for Western Asset and Future Scholar
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Future is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Future Scholar 529 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Scholar 529 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 Future Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Scholar 529 has no effect on the direction of Western Asset i.e., Western Asset and Future Scholar go up and down completely randomly.
Pair Corralation between Western Asset and Future Scholar
Assuming the 90 days horizon Western Asset High is expected to generate 1.55 times more return on investment than Future Scholar. However, Western Asset is 1.55 times more volatile than Future Scholar 529. It trades about 0.23 of its potential returns per unit of risk. Future Scholar 529 is currently generating about 0.12 per unit of risk. If you would invest 695.00 in Western Asset High on October 20, 2024 and sell it today you would earn a total of 7.00 from holding Western Asset High or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset High vs. Future Scholar 529
Performance |
| Timeline |
| Western Asset High |
| Future Scholar 529 |
Western Asset and Future Scholar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Future Scholar
The main advantage of trading using opposite Western Asset and Future Scholar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Future Scholar 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 Future Scholar will offset losses from the drop in Future Scholar's long position.| Western Asset vs. Leader Short Term Bond | Western Asset vs. Aamhimco Short Duration | Western Asset vs. Aqr Sustainable Long Short | Western Asset vs. Prudential Short Duration |
| Future Scholar vs. Victory Rs Partners | Future Scholar vs. Eip Growth And | Future Scholar vs. Ab New York | Future Scholar vs. Fmasx |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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