Correlation Between Western Assets and William Blair
Can any of the company-specific risk be diversified away by investing in both Western Assets and William Blair 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 William Blair 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 William Blair Small, you can compare the effects of market volatilities on Western Assets and William Blair 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 William Blair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and William Blair.
Diversification Opportunities for Western Assets and William Blair
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and William is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and William Blair Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Blair Small 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 William Blair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Blair Small has no effect on the direction of Western Assets i.e., Western Assets and William Blair go up and down completely randomly.
Pair Corralation between Western Assets and William Blair
Assuming the 90 days horizon Western Assets Emerging is expected to generate 0.25 times more return on investment than William Blair. However, Western Assets Emerging is 4.06 times less risky than William Blair. It trades about -0.31 of its potential returns per unit of risk. William Blair Small is currently generating about -0.36 per unit of risk. If you would invest 1,089 in Western Assets Emerging on October 11, 2024 and sell it today you would lose (22.00) from holding Western Assets Emerging or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Western Assets Emerging vs. William Blair Small
Performance |
| Timeline |
| Western Assets Emerging |
| William Blair Small |
Western Assets and William Blair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and William Blair
The main advantage of trading using opposite Western Assets and William Blair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets position performs unexpectedly, William Blair 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 William Blair will offset losses from the drop in William Blair's long position.| Western Assets vs. Metropolitan West Porate | Western Assets vs. Multisector Bond Sma | Western Assets vs. Blrc Sgy Mnp | Western Assets vs. Artisan High Income |
| William Blair vs. Tiaa Cref Real Estate | William Blair vs. Prudential Real Estate | William Blair vs. Rems Real Estate | William Blair vs. Fidelity Real Estate |
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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