Correlation Between Western Assets and Dws Emerging
Can any of the company-specific risk be diversified away by investing in both Western Assets and Dws Emerging 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 Dws Emerging 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 Dws Emerging Markets, you can compare the effects of market volatilities on Western Assets and Dws Emerging 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 Dws Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and Dws Emerging.
Diversification Opportunities for Western Assets and Dws Emerging
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Dws is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and Dws Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dws Emerging Markets 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 Dws Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dws Emerging Markets has no effect on the direction of Western Assets i.e., Western Assets and Dws Emerging go up and down completely randomly.
Pair Corralation between Western Assets and Dws Emerging
Assuming the 90 days horizon Western Assets Emerging is expected to generate 0.35 times more return on investment than Dws Emerging. However, Western Assets Emerging is 2.82 times less risky than Dws Emerging. It trades about -0.09 of its potential returns per unit of risk. Dws Emerging Markets is currently generating about -0.15 per unit of risk. If you would invest 1,083 in Western Assets Emerging on August 28, 2024 and sell it today you would lose (14.00) from holding Western Assets Emerging or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Assets Emerging vs. Dws Emerging Markets
Performance |
| Timeline |
| Western Assets Emerging |
| Dws Emerging Markets |
Western Assets and Dws Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and Dws Emerging
The main advantage of trading using opposite Western Assets and Dws Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets position performs unexpectedly, Dws Emerging 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 Dws Emerging will offset losses from the drop in Dws Emerging's long position.| Western Assets vs. Moderately Aggressive Balanced | Western Assets vs. Wisdomtree Siegel Moderate | Western Assets vs. Pgim Conservative Retirement | Western Assets vs. Lifestyle Ii Moderate |
| Dws Emerging vs. Massmutual Select T | Dws Emerging vs. Dodge Cox Stock | Dws Emerging vs. Federated Mdt Large | Dws Emerging vs. Qs Large Cap |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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