Correlation Between Western Assets and Fpa Queens
Can any of the company-specific risk be diversified away by investing in both Western Assets and Fpa Queens 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 Fpa Queens 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 Fpa Queens Road, you can compare the effects of market volatilities on Western Assets and Fpa Queens 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 Fpa Queens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and Fpa Queens.
Diversification Opportunities for Western Assets and Fpa Queens
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Fpa is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and Fpa Queens Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fpa Queens Road 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 Fpa Queens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fpa Queens Road has no effect on the direction of Western Assets i.e., Western Assets and Fpa Queens go up and down completely randomly.
Pair Corralation between Western Assets and Fpa Queens
Assuming the 90 days horizon Western Assets is expected to generate 1.16 times less return on investment than Fpa Queens. But when comparing it to its historical volatility, Western Assets Emerging is 2.97 times less risky than Fpa Queens. It trades about 0.09 of its potential returns per unit of risk. Fpa Queens Road is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,649 in Fpa Queens Road on October 18, 2024 and sell it today you would earn a total of 309.00 from holding Fpa Queens Road or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Assets Emerging vs. Fpa Queens Road
Performance |
| Timeline |
| Western Assets Emerging |
| Fpa Queens Road |
Western Assets and Fpa Queens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and Fpa Queens
The main advantage of trading using opposite Western Assets and Fpa Queens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets position performs unexpectedly, Fpa Queens 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 Fpa Queens will offset losses from the drop in Fpa Queens' long position.| Western Assets vs. Science Technology Fund | Western Assets vs. Hennessy Technology Fund | Western Assets vs. Red Oak Technology | Western Assets vs. Invesco Technology Fund |
| Fpa Queens vs. Franklin Emerging Market | Fpa Queens vs. Western Assets Emerging | Fpa Queens vs. Ashmore Emerging Markets | Fpa Queens vs. Catalystmillburn Hedge Strategy |
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 Stocks Directory module to find actively traded stocks across global markets.
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