Correlation Between Western Asset and Columbia Marsico
Can any of the company-specific risk be diversified away by investing in both Western Asset and Columbia Marsico 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 Columbia Marsico 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 Columbia Marsico Growth, you can compare the effects of market volatilities on Western Asset and Columbia Marsico 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 Columbia Marsico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Columbia Marsico.
Diversification Opportunities for Western Asset and Columbia Marsico
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Columbia is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Columbia Marsico Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Marsico Growth 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 Columbia Marsico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Marsico Growth has no effect on the direction of Western Asset i.e., Western Asset and Columbia Marsico go up and down completely randomly.
Pair Corralation between Western Asset and Columbia Marsico
Assuming the 90 days horizon Western Asset Municipal is expected to generate 0.71 times more return on investment than Columbia Marsico. However, Western Asset Municipal is 1.41 times less risky than Columbia Marsico. It trades about 0.02 of its potential returns per unit of risk. Columbia Marsico Growth is currently generating about 0.0 per unit of risk. If you would invest 709.00 in Western Asset Municipal on September 13, 2024 and sell it today you would earn a total of 23.00 from holding Western Asset Municipal or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.13% |
| Values | Daily Returns |
Western Asset Municipal vs. Columbia Marsico Growth
Performance |
| Timeline |
| Western Asset Municipal |
| Columbia Marsico Growth |
Western Asset and Columbia Marsico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Columbia Marsico
The main advantage of trading using opposite Western Asset and Columbia Marsico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Columbia Marsico 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 Columbia Marsico will offset losses from the drop in Columbia Marsico'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 |
| Columbia Marsico vs. Arrow Managed Futures | Columbia Marsico vs. T Rowe Price | Columbia Marsico vs. Western Asset Municipal | Columbia Marsico vs. Abr 7525 Volatility |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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