Correlation Between Western Asset and Ab Global
Can any of the company-specific risk be diversified away by investing in both Western Asset and Ab Global 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 Asset and Ab Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Municipal and Ab Global Bond, you can compare the effects of market volatilities on Western Asset and Ab Global 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 Asset with a short position of Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Ab Global.
Diversification Opportunities for Western Asset and Ab Global
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and ANAGX is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Ab Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Bond and Western Asset 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 Asset Municipal are associated (or correlated) with Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Bond has no effect on the direction of Western Asset i.e., Western Asset and Ab Global go up and down completely randomly.
Pair Corralation between Western Asset and Ab Global
Assuming the 90 days horizon Western Asset Municipal is expected to under-perform the Ab Global. In addition to that, Western Asset is 1.51 times more volatile than Ab Global Bond. It trades about -0.01 of its total potential returns per unit of risk. Ab Global Bond is currently generating about 0.02 per unit of volatility. If you would invest 693.00 in Ab Global Bond on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Ab Global Bond or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Western Asset Municipal vs. Ab Global Bond
Performance |
| Timeline |
| Western Asset Municipal |
| Ab Global Bond |
Western Asset and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Ab Global
The main advantage of trading using opposite Western Asset and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Ab Global vs. Qs Global Equity | Ab Global vs. Touchstone International Equity | Ab Global vs. Rbc Global Equity | Ab Global vs. Ab Select Equity |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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