Correlation Between Western Asset and Forum Real
Can any of the company-specific risk be diversified away by investing in both Western Asset and Forum Real 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 Forum Real 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 Forum Real Estate, you can compare the effects of market volatilities on Western Asset and Forum Real 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 Forum Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Forum Real.
Diversification Opportunities for Western Asset and Forum Real
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Forum is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Forum Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Real Estate 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 Forum Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Real Estate has no effect on the direction of Western Asset i.e., Western Asset and Forum Real go up and down completely randomly.
Pair Corralation between Western Asset and Forum Real
Assuming the 90 days horizon Western Asset High is expected to generate 0.74 times more return on investment than Forum Real. However, Western Asset High is 1.36 times less risky than Forum Real. It trades about 0.16 of its potential returns per unit of risk. Forum Real Estate is currently generating about 0.06 per unit of risk. If you would invest 693.00 in Western Asset High on September 5, 2024 and sell it today you would earn a total of 3.00 from holding Western Asset High or generate 0.43% 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. Forum Real Estate
Performance |
| Timeline |
| Western Asset High |
| Forum Real Estate |
Western Asset and Forum Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Forum Real
The main advantage of trading using opposite Western Asset and Forum Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Forum Real 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 Forum Real will offset losses from the drop in Forum Real's long position.| Western Asset vs. Forum Real Estate | Western Asset vs. Goldman Sachs Real | Western Asset vs. Nuveen Real Estate | Western Asset vs. Great West Real Estate |
| Forum Real vs. Old Westbury Large | Forum Real vs. Mirova Global Green | Forum Real vs. Qs Large Cap | Forum Real vs. Rational Strategic Allocation |
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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