Correlation Between Western Asset and Aberdeen Ultra
Can any of the company-specific risk be diversified away by investing in both Western Asset and Aberdeen Ultra 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 Aberdeen Ultra 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 Aberdeen Ultra Short, you can compare the effects of market volatilities on Western Asset and Aberdeen Ultra 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 Aberdeen Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Aberdeen Ultra.
Diversification Opportunities for Western Asset and Aberdeen Ultra
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Aberdeen is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Aberdeen Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Ultra Short 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 Aberdeen Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Ultra Short has no effect on the direction of Western Asset i.e., Western Asset and Aberdeen Ultra go up and down completely randomly.
Pair Corralation between Western Asset and Aberdeen Ultra
Assuming the 90 days horizon Western Asset is expected to generate 1.36 times less return on investment than Aberdeen Ultra. In addition to that, Western Asset is 5.92 times more volatile than Aberdeen Ultra Short. It trades about 0.03 of its total potential returns per unit of risk. Aberdeen Ultra Short is currently generating about 0.27 per unit of volatility. If you would invest 1,006 in Aberdeen Ultra Short on August 30, 2024 and sell it today you would earn a total of 4.00 from holding Aberdeen Ultra Short or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Aberdeen Ultra Short
Performance |
| Timeline |
| Western Asset Municipal |
| Aberdeen Ultra Short |
Western Asset and Aberdeen Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Aberdeen Ultra
The main advantage of trading using opposite Western Asset and Aberdeen Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Aberdeen Ultra 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 Aberdeen Ultra will offset losses from the drop in Aberdeen Ultra'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 |
| Aberdeen Ultra vs. Ab Value Fund | Aberdeen Ultra vs. Falcon Focus Scv | Aberdeen Ultra vs. Fa 529 Aggressive | Aberdeen Ultra vs. Rbc Microcap Value |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |