Correlation Between Western Asset and Artisan Mid
Can any of the company-specific risk be diversified away by investing in both Western Asset and Artisan Mid 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 Artisan Mid 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 Artisan Mid Cap, you can compare the effects of market volatilities on Western Asset and Artisan Mid 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 Artisan Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Artisan Mid.
Diversification Opportunities for Western Asset and Artisan Mid
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Artisan is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Artisan Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Mid Cap 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 Artisan Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Mid Cap has no effect on the direction of Western Asset i.e., Western Asset and Artisan Mid go up and down completely randomly.
Pair Corralation between Western Asset and Artisan Mid
Assuming the 90 days horizon Western Asset Municipal is expected to generate 0.24 times more return on investment than Artisan Mid. However, Western Asset Municipal is 4.21 times less risky than Artisan Mid. It trades about -0.01 of its potential returns per unit of risk. Artisan Mid Cap is currently generating about 0.0 per unit of risk. If you would invest 726.00 in Western Asset Municipal on October 7, 2024 and sell it today you would lose (8.00) from holding Western Asset Municipal or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Artisan Mid Cap
Performance |
| Timeline |
| Western Asset Municipal |
| Artisan Mid Cap |
Western Asset and Artisan Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Artisan Mid
The main advantage of trading using opposite Western Asset and Artisan Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Artisan Mid 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 Artisan Mid will offset losses from the drop in Artisan Mid's long position.| Western Asset vs. Tekla Healthcare Investors | Western Asset vs. Health Care Ultrasector | Western Asset vs. The Hartford Healthcare | Western Asset vs. Blackrock Health Sciences |
| Artisan Mid vs. Fidelity Sai Inflationfocused | Artisan Mid vs. Altegris Futures Evolution | Artisan Mid vs. Guidepath Managed Futures | Artisan Mid vs. Short Duration Inflation |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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