Correlation Between Western Asset and Ivy High
Can any of the company-specific risk be diversified away by investing in both Western Asset and Ivy High 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 Ivy High 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 Ivy High Income, you can compare the effects of market volatilities on Western Asset and Ivy High 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 Ivy High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Ivy High.
Diversification Opportunities for Western Asset and Ivy High
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Ivy is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Ivy High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy High Income 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 Ivy High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy High Income has no effect on the direction of Western Asset i.e., Western Asset and Ivy High go up and down completely randomly.
Pair Corralation between Western Asset and Ivy High
Assuming the 90 days horizon Western Asset High is expected to generate 0.81 times more return on investment than Ivy High. However, Western Asset High is 1.24 times less risky than Ivy High. It trades about 0.11 of its potential returns per unit of risk. Ivy High Income is currently generating about 0.09 per unit of risk. If you would invest 593.00 in Western Asset High on September 3, 2024 and sell it today you would earn a total of 115.00 from holding Western Asset High or generate 19.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset High vs. Ivy High Income
Performance |
| Timeline |
| Western Asset High |
| Ivy High Income |
Western Asset and Ivy High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Ivy High
The main advantage of trading using opposite Western Asset and Ivy High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Ivy High 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 Ivy High will offset losses from the drop in Ivy High's long position.| Western Asset vs. Oklahoma College Savings | Western Asset vs. Massmutual Select Diversified | Western Asset vs. Jpmorgan Emerging Markets | Western Asset vs. Locorr Market Trend |
| Ivy High vs. Baillie Gifford Health | Ivy High vs. Alger Health Sciences | Ivy High vs. Allianzgi Health Sciences | Ivy High vs. Eventide Healthcare Life |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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