Correlation Between Western Assets and Saat Defensive
Can any of the company-specific risk be diversified away by investing in both Western Assets and Saat Defensive 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 Saat Defensive 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 Saat Defensive Strategy, you can compare the effects of market volatilities on Western Assets and Saat Defensive 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 Saat Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and Saat Defensive.
Diversification Opportunities for Western Assets and Saat Defensive
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Saat is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and Saat Defensive Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Defensive Strategy 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 Saat Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Defensive Strategy has no effect on the direction of Western Assets i.e., Western Assets and Saat Defensive go up and down completely randomly.
Pair Corralation between Western Assets and Saat Defensive
Assuming the 90 days horizon Western Assets Emerging is expected to generate 2.93 times more return on investment than Saat Defensive. However, Western Assets is 2.93 times more volatile than Saat Defensive Strategy. It trades about 0.09 of its potential returns per unit of risk. Saat Defensive Strategy is currently generating about 0.14 per unit of risk. If you would invest 895.00 in Western Assets Emerging on November 2, 2024 and sell it today you would earn a total of 174.00 from holding Western Assets Emerging or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Western Assets Emerging vs. Saat Defensive Strategy
Performance |
| Timeline |
| Western Assets Emerging |
| Saat Defensive Strategy |
Western Assets and Saat Defensive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and Saat Defensive
The main advantage of trading using opposite Western Assets and Saat Defensive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets position performs unexpectedly, Saat Defensive 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 Saat Defensive will offset losses from the drop in Saat Defensive'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 |
| Saat Defensive vs. Saat Tax Managed Aggressive | Saat Defensive vs. Saat Market Growth | Saat Defensive vs. Saat Aggressive Strategy | Saat Defensive vs. Saat Aggressive 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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