Correlation Between Western Asset and Hartford Schroders
Can any of the company-specific risk be diversified away by investing in both Western Asset and Hartford Schroders 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 Hartford Schroders 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 Hartford Schroders International, you can compare the effects of market volatilities on Western Asset and Hartford Schroders 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 Hartford Schroders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Hartford Schroders.
Diversification Opportunities for Western Asset and Hartford Schroders
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Hartford is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Hartford Schroders Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Schroders 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 Hartford Schroders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Schroders has no effect on the direction of Western Asset i.e., Western Asset and Hartford Schroders go up and down completely randomly.
Pair Corralation between Western Asset and Hartford Schroders
Assuming the 90 days horizon Western Asset High is expected to generate 0.23 times more return on investment than Hartford Schroders. However, Western Asset High is 4.35 times less risky than Hartford Schroders. It trades about 0.05 of its potential returns per unit of risk. Hartford Schroders International is currently generating about -0.02 per unit of risk. If you would invest 708.00 in Western Asset High on September 12, 2024 and sell it today you would earn a total of 1.00 from holding Western Asset High or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Asset High vs. Hartford Schroders Internation
Performance |
| Timeline |
| Western Asset High |
| Hartford Schroders |
Western Asset and Hartford Schroders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Hartford Schroders
The main advantage of trading using opposite Western Asset and Hartford Schroders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Hartford Schroders 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 Hartford Schroders will offset losses from the drop in Hartford Schroders' long position.| Western Asset vs. SCOR PK | Western Asset vs. Morningstar Unconstrained Allocation | Western Asset vs. Via Renewables | Western Asset vs. Bondbloxx ETF Trust |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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