Correlation Between Western Asset and Huber Capital
Can any of the company-specific risk be diversified away by investing in both Western Asset and Huber Capital 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 Huber Capital 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 Huber Capital Diversified, you can compare the effects of market volatilities on Western Asset and Huber Capital 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 Huber Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Huber Capital.
Diversification Opportunities for Western Asset and Huber Capital
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Huber is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Huber Capital Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huber Capital Diversified 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 Huber Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huber Capital Diversified has no effect on the direction of Western Asset i.e., Western Asset and Huber Capital go up and down completely randomly.
Pair Corralation between Western Asset and Huber Capital
Assuming the 90 days horizon Western Asset is expected to generate 2.32 times less return on investment than Huber Capital. But when comparing it to its historical volatility, Western Asset High is 6.47 times less risky than Huber Capital. It trades about 0.11 of its potential returns per unit of risk. Huber Capital Diversified is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,498 in Huber Capital Diversified on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Huber Capital Diversified or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset High vs. Huber Capital Diversified
Performance |
| Timeline |
| Western Asset High |
| Huber Capital Diversified |
Western Asset and Huber Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Huber Capital
The main advantage of trading using opposite Western Asset and Huber Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Huber Capital 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 Huber Capital will offset losses from the drop in Huber Capital'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 |
| Huber Capital vs. Ppm High Yield | Huber Capital vs. Calvert High Yield | Huber Capital vs. Western Asset High | Huber Capital vs. Siit 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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