Correlation Between Western Assets and 1290 Retirement
Can any of the company-specific risk be diversified away by investing in both Western Assets and 1290 Retirement 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 1290 Retirement 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 1290 Retirement 2045, you can compare the effects of market volatilities on Western Assets and 1290 Retirement 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 1290 Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and 1290 Retirement.
Diversification Opportunities for Western Assets and 1290 Retirement
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and 1290 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and 1290 Retirement 2045 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1290 Retirement 2045 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 1290 Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1290 Retirement 2045 has no effect on the direction of Western Assets i.e., Western Assets and 1290 Retirement go up and down completely randomly.
Pair Corralation between Western Assets and 1290 Retirement
Assuming the 90 days horizon Western Assets Emerging is expected to generate 0.47 times more return on investment than 1290 Retirement. However, Western Assets Emerging is 2.11 times less risky than 1290 Retirement. It trades about 0.23 of its potential returns per unit of risk. 1290 Retirement 2045 is currently generating about 0.08 per unit of risk. If you would invest 1,059 in Western Assets Emerging on October 25, 2024 and sell it today you would earn a total of 13.00 from holding Western Assets Emerging or generate 1.23% 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. 1290 Retirement 2045
Performance |
| Timeline |
| Western Assets Emerging |
| 1290 Retirement 2045 |
Western Assets and 1290 Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and 1290 Retirement
The main advantage of trading using opposite Western Assets and 1290 Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets position performs unexpectedly, 1290 Retirement 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 1290 Retirement will offset losses from the drop in 1290 Retirement's long position.| Western Assets vs. Tax Managed Mid Small | Western Assets vs. Ab Small Cap | Western Assets vs. Smallcap Fund Fka | Western Assets vs. Kinetics Small Cap |
| 1290 Retirement vs. Dreyfus Government Cash | 1290 Retirement vs. Federated Government Ultrashort | 1290 Retirement vs. Lord Abbett Government | 1290 Retirement vs. Us Government Securities |
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 CEOs Directory module to screen CEOs from public companies around the world.
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