Correlation Between Western Asset and Blackrock Muniassets
Can any of the company-specific risk be diversified away by investing in both Western Asset and Blackrock Muniassets 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 Blackrock Muniassets 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 Blackrock Muniassets, you can compare the effects of market volatilities on Western Asset and Blackrock Muniassets 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 Blackrock Muniassets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Blackrock Muniassets.
Diversification Opportunities for Western Asset and Blackrock Muniassets
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Blackrock is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Blackrock Muniassets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniassets 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 Blackrock Muniassets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniassets has no effect on the direction of Western Asset i.e., Western Asset and Blackrock Muniassets go up and down completely randomly.
Pair Corralation between Western Asset and Blackrock Muniassets
Assuming the 90 days horizon Western Asset is expected to generate 5.62 times less return on investment than Blackrock Muniassets. But when comparing it to its historical volatility, Western Asset High is 4.05 times less risky than Blackrock Muniassets. It trades about 0.15 of its potential returns per unit of risk. Blackrock Muniassets is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,172 in Blackrock Muniassets on September 3, 2024 and sell it today you would earn a total of 28.00 from holding Blackrock Muniassets or generate 2.39% 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. Blackrock Muniassets
Performance |
| Timeline |
| Western Asset High |
| Blackrock Muniassets |
Western Asset and Blackrock Muniassets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Blackrock Muniassets
The main advantage of trading using opposite Western Asset and Blackrock Muniassets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Blackrock Muniassets 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 Blackrock Muniassets will offset losses from the drop in Blackrock Muniassets' 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 |
| Blackrock Muniassets vs. Morningstar Aggressive Growth | Blackrock Muniassets vs. Western Asset High | Blackrock Muniassets vs. Vanguard Star Fund | Blackrock Muniassets 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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