Correlation Between Western Asset and BlackRock Capital
Can any of the company-specific risk be diversified away by investing in both Western Asset and BlackRock Capital 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 Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and BlackRock Capital Allocation, you can compare the effects of market volatilities on Western Asset and BlackRock Capital 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 Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and BlackRock Capital.
Diversification Opportunities for Western Asset and BlackRock Capital
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and BlackRock is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and BlackRock Capital Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Capital 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 Diversified are associated (or correlated) with BlackRock Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Capital has no effect on the direction of Western Asset i.e., Western Asset and BlackRock Capital go up and down completely randomly.
Pair Corralation between Western Asset and BlackRock Capital
Considering the 90-day investment horizon Western Asset is expected to generate 5.27 times less return on investment than BlackRock Capital. In addition to that, Western Asset is 1.05 times more volatile than BlackRock Capital Allocation. It trades about 0.06 of its total potential returns per unit of risk. BlackRock Capital Allocation is currently generating about 0.32 per unit of volatility. If you would invest 1,547 in BlackRock Capital Allocation on August 30, 2024 and sell it today you would earn a total of 71.00 from holding BlackRock Capital Allocation or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. BlackRock Capital Allocation
Performance |
| Timeline |
| Western Asset Diversified |
| BlackRock Capital |
Western Asset and BlackRock Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and BlackRock Capital
The main advantage of trading using opposite Western Asset and BlackRock Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, BlackRock Capital 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 Capital will offset losses from the drop in BlackRock Capital's long position.| Western Asset vs. Neuberger Berman Next | Western Asset vs. Doubleline Yield Opportunities | Western Asset vs. PIMCO Access Income | Western Asset vs. Blackrock Innovation Growth |
| BlackRock Capital vs. BlackRock Health Sciences | BlackRock Capital vs. BlackRock Science and | BlackRock Capital vs. Neuberger Berman Next | BlackRock Capital vs. Virtus Allianzgi Artificial |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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