Correlation Between Western Asset and Qs International
Can any of the company-specific risk be diversified away by investing in both Western Asset and Qs International 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 Qs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Intermediate and Qs International Equity, you can compare the effects of market volatilities on Western Asset and Qs International 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 Qs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Qs International.
Diversification Opportunities for Western Asset and Qs International
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and LGFEX is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Intermediate and Qs International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs International Equity 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 Intermediate are associated (or correlated) with Qs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs International Equity has no effect on the direction of Western Asset i.e., Western Asset and Qs International go up and down completely randomly.
Pair Corralation between Western Asset and Qs International
Assuming the 90 days horizon Western Asset Intermediate is expected to generate 0.34 times more return on investment than Qs International. However, Western Asset Intermediate is 2.97 times less risky than Qs International. It trades about -0.1 of its potential returns per unit of risk. Qs International Equity is currently generating about -0.2 per unit of risk. If you would invest 966.00 in Western Asset Intermediate on August 24, 2024 and sell it today you would lose (5.00) from holding Western Asset Intermediate or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Intermediate vs. Qs International Equity
Performance |
| Timeline |
| Western Asset Interm |
| Qs International Equity |
Western Asset and Qs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Qs International
The main advantage of trading using opposite Western Asset and Qs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Qs International 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 Qs International will offset losses from the drop in Qs International's long position.| Western Asset vs. Invesco Government Fund | Western Asset vs. John Hancock Government | Western Asset vs. Us Government Securities | Western Asset vs. Virtus Seix Government |
| Qs International vs. Artisan Developing World | Qs International vs. Artisan High Income | Qs International vs. HUMANA INC | Qs International vs. Aquagold International |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |