Correlation Between Western Asset and Artisan Small
Can any of the company-specific risk be diversified away by investing in both Western Asset and Artisan Small 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 Small 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 Small Cap, you can compare the effects of market volatilities on Western Asset and Artisan Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Artisan Small.
Diversification Opportunities for Western Asset and Artisan Small
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Artisan is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Artisan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Small 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 Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Small Cap has no effect on the direction of Western Asset i.e., Western Asset and Artisan Small go up and down completely randomly.
Pair Corralation between Western Asset and Artisan Small
Assuming the 90 days horizon Western Asset Municipal is expected to generate 0.11 times more return on investment than Artisan Small. However, Western Asset Municipal is 8.95 times less risky than Artisan Small. It trades about 0.23 of its potential returns per unit of risk. Artisan Small Cap is currently generating about -0.07 per unit of risk. If you would invest 725.00 in Western Asset Municipal on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Western Asset Municipal or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Artisan Small Cap
Performance |
| Timeline |
| Western Asset Municipal |
| Artisan Small Cap |
Western Asset and Artisan Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Artisan Small
The main advantage of trading using opposite Western Asset and Artisan Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Artisan Small 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 Small will offset losses from the drop in Artisan Small'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 |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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