Correlation Between Western Asset and Dunham Porategovernment
Can any of the company-specific risk be diversified away by investing in both Western Asset and Dunham Porategovernment 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 Dunham Porategovernment 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 Dunham Porategovernment Bond, you can compare the effects of market volatilities on Western Asset and Dunham Porategovernment 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 Dunham Porategovernment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Dunham Porategovernment.
Diversification Opportunities for Western Asset and Dunham Porategovernment
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Dunham is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Dunham Porategovernment Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Porategovernment 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 Dunham Porategovernment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Porategovernment has no effect on the direction of Western Asset i.e., Western Asset and Dunham Porategovernment go up and down completely randomly.
Pair Corralation between Western Asset and Dunham Porategovernment
Assuming the 90 days horizon Western Asset is expected to generate 4.23 times less return on investment than Dunham Porategovernment. But when comparing it to its historical volatility, Western Asset High is 1.9 times less risky than Dunham Porategovernment. It trades about 0.11 of its potential returns per unit of risk. Dunham Porategovernment Bond is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,250 in Dunham Porategovernment Bond on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Dunham Porategovernment Bond or generate 1.2% 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. Dunham Porategovernment Bond
Performance |
| Timeline |
| Western Asset High |
| Dunham Porategovernment |
Western Asset and Dunham Porategovernment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Dunham Porategovernment
The main advantage of trading using opposite Western Asset and Dunham Porategovernment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Dunham Porategovernment 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 Dunham Porategovernment will offset losses from the drop in Dunham Porategovernment's long position.| Western Asset vs. Guggenheim Risk Managed | Western Asset vs. Simt Real Estate | Western Asset vs. Redwood Real Estate | Western Asset vs. Vy Clarion Real |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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