Correlation Between Western Assets and Hartford Total
Can any of the company-specific risk be diversified away by investing in both Western Assets and Hartford Total 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 Hartford Total 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 Hartford Total Return, you can compare the effects of market volatilities on Western Assets and Hartford Total 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 Hartford Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and Hartford Total.
Diversification Opportunities for Western Assets and Hartford Total
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Hartford is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and Hartford Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Total Return 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 Hartford Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Total Return has no effect on the direction of Western Assets i.e., Western Assets and Hartford Total go up and down completely randomly.
Pair Corralation between Western Assets and Hartford Total
Assuming the 90 days horizon Western Assets Emerging is expected to under-perform the Hartford Total. In addition to that, Western Assets is 1.4 times more volatile than Hartford Total Return. It trades about -0.45 of its total potential returns per unit of risk. Hartford Total Return is currently generating about -0.43 per unit of volatility. If you would invest 961.00 in Hartford Total Return on October 9, 2024 and sell it today you would lose (17.00) from holding Hartford Total Return or give up 1.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Assets Emerging vs. Hartford Total Return
Performance |
| Timeline |
| Western Assets Emerging |
| Hartford Total Return |
Western Assets and Hartford Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and Hartford Total
The main advantage of trading using opposite Western Assets and Hartford Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets position performs unexpectedly, Hartford Total 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 Hartford Total will offset losses from the drop in Hartford Total's long position.| Western Assets vs. Dunham Real Estate | Western Assets vs. Nuveen Real Estate | Western Assets vs. Pender Real Estate | Western Assets vs. Vanguard Reit Index |
| Hartford Total vs. Ishares Municipal Bond | Hartford Total vs. Fidelity California Municipal | Hartford Total vs. Inverse Government Long | Hartford Total vs. Bbh Intermediate 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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