Correlation Between Western Asset and Victory Rs
Can any of the company-specific risk be diversified away by investing in both Western Asset and Victory Rs 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 Victory Rs 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 Victory Rs Small, you can compare the effects of market volatilities on Western Asset and Victory Rs 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 Victory Rs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Victory Rs.
Diversification Opportunities for Western Asset and Victory Rs
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Victory is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Victory Rs Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Rs Small 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 Victory Rs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Rs Small has no effect on the direction of Western Asset i.e., Western Asset and Victory Rs go up and down completely randomly.
Pair Corralation between Western Asset and Victory Rs
Assuming the 90 days horizon Western Asset is expected to generate 50.64 times less return on investment than Victory Rs. But when comparing it to its historical volatility, Western Asset High is 11.36 times less risky than Victory Rs. It trades about 0.11 of its potential returns per unit of risk. Victory Rs Small is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 922.00 in Victory Rs Small on September 1, 2024 and sell it today you would earn a total of 143.00 from holding Victory Rs Small or generate 15.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset High vs. Victory Rs Small
Performance |
| Timeline |
| Western Asset High |
| Victory Rs Small |
Western Asset and Victory Rs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Victory Rs
The main advantage of trading using opposite Western Asset and Victory Rs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Victory Rs 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 Victory Rs will offset losses from the drop in Victory Rs' long position.| Western Asset vs. Franklin Mutual Beacon | Western Asset vs. Templeton Developing Markets | Western Asset vs. Franklin Mutual Global | Western Asset vs. Franklin Mutual Global |
| Victory Rs vs. Legg Mason Partners | Victory Rs vs. Dunham High Yield | Victory Rs vs. Fidelity Capital Income | Victory Rs vs. Western Asset High |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |