Correlation Between Western Assets and Ab Global
Can any of the company-specific risk be diversified away by investing in both Western Assets and Ab Global 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 Assets and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Assets Emerging and Ab Global Bond, you can compare the effects of market volatilities on Western Assets and Ab Global 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 Assets with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and Ab Global.
Diversification Opportunities for Western Assets and Ab Global
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and ANAGX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and Ab Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Bond and Western Assets 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 Assets Emerging are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Bond has no effect on the direction of Western Assets i.e., Western Assets and Ab Global go up and down completely randomly.
Pair Corralation between Western Assets and Ab Global
Assuming the 90 days horizon Western Assets Emerging is expected to generate 1.29 times more return on investment than Ab Global. However, Western Assets is 1.29 times more volatile than Ab Global Bond. It trades about 0.1 of its potential returns per unit of risk. Ab Global Bond is currently generating about 0.03 per unit of risk. If you would invest 1,062 in Western Assets Emerging on November 3, 2024 and sell it today you would earn a total of 7.00 from holding Western Assets Emerging or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Assets Emerging vs. Ab Global Bond
Performance |
| Timeline |
| Western Assets Emerging |
| Ab Global Bond |
Western Assets and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and Ab Global
The main advantage of trading using opposite Western Assets and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Western Assets vs. Ab Bond Inflation | Western Assets vs. Intermediate Bond Fund | Western Assets vs. Goldman Sachs Short | Western Assets vs. Barings High Yield |
| Ab Global vs. Davis Government Bond | Ab Global vs. Dunham Porategovernment Bond | Ab Global vs. Great West Government Mortgage | Ab Global vs. Intermediate Government Bond |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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