Correlation Between Scharf Global and Western Asset
Can any of the company-specific risk be diversified away by investing in both Scharf Global and Western Asset 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 Scharf Global and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Western Asset Adjustable, you can compare the effects of market volatilities on Scharf Global and Western Asset 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 Scharf Global with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Western Asset.
Diversification Opportunities for Scharf Global and Western Asset
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scharf and Western is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Western Asset Adjustable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Adjustable and Scharf Global 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 Scharf Global Opportunity are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Adjustable has no effect on the direction of Scharf Global i.e., Scharf Global and Western Asset go up and down completely randomly.
Pair Corralation between Scharf Global and Western Asset
Assuming the 90 days horizon Scharf Global Opportunity is expected to generate 14.0 times more return on investment than Western Asset. However, Scharf Global is 14.0 times more volatile than Western Asset Adjustable. It trades about 0.28 of its potential returns per unit of risk. Western Asset Adjustable is currently generating about 0.22 per unit of risk. If you would invest 3,497 in Scharf Global Opportunity on November 8, 2024 and sell it today you would earn a total of 137.00 from holding Scharf Global Opportunity or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Western Asset Adjustable
Performance |
| Timeline |
| Scharf Global Opportunity |
| Western Asset Adjustable |
Scharf Global and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Western Asset
The main advantage of trading using opposite Scharf Global and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Scharf Global vs. Nuveen Short Term | Scharf Global vs. Fidelity Flex Servative | Scharf Global vs. Siit Ultra Short | Scharf Global vs. Delaware Investments Ultrashort |
| Western Asset vs. Western Asset Adjustable | Western Asset vs. Short Term Fund A | Western Asset vs. Western Asset Mortgage | Western Asset vs. Western Asset Intermediate Term |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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