Correlation Between Western Asset and Phenixfin
Can any of the company-specific risk be diversified away by investing in both Western Asset and Phenixfin 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 Phenixfin 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 Phenixfin, you can compare the effects of market volatilities on Western Asset and Phenixfin 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 Phenixfin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Phenixfin.
Diversification Opportunities for Western Asset and Phenixfin
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Phenixfin is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Phenixfin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phenixfin 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 Phenixfin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phenixfin has no effect on the direction of Western Asset i.e., Western Asset and Phenixfin go up and down completely randomly.
Pair Corralation between Western Asset and Phenixfin
Considering the 90-day investment horizon Western Asset Diversified is expected to generate 0.32 times more return on investment than Phenixfin. However, Western Asset Diversified is 3.16 times less risky than Phenixfin. It trades about 0.01 of its potential returns per unit of risk. Phenixfin is currently generating about -0.02 per unit of risk. If you would invest 1,483 in Western Asset Diversified on August 31, 2024 and sell it today you would earn a total of 1.00 from holding Western Asset Diversified or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Phenixfin
Performance |
| Timeline |
| Western Asset Diversified |
| Phenixfin |
Western Asset and Phenixfin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Phenixfin
The main advantage of trading using opposite Western Asset and Phenixfin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Phenixfin 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 Phenixfin will offset losses from the drop in Phenixfin'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 |
| Phenixfin vs. MFS Investment Grade | Phenixfin vs. Eaton Vance National | Phenixfin vs. Invesco High Income | Phenixfin vs. Federated Premier Municipal |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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