Correlation Between Western Asset and Holbrook Structured
Can any of the company-specific risk be diversified away by investing in both Western Asset and Holbrook Structured 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 Holbrook Structured 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 Holbrook Structured Income, you can compare the effects of market volatilities on Western Asset and Holbrook Structured 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 Holbrook Structured. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Holbrook Structured.
Diversification Opportunities for Western Asset and Holbrook Structured
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Holbrook is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Holbrook Structured Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holbrook Structured 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 Holbrook Structured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holbrook Structured has no effect on the direction of Western Asset i.e., Western Asset and Holbrook Structured go up and down completely randomly.
Pair Corralation between Western Asset and Holbrook Structured
Assuming the 90 days horizon Western Asset Municipal is expected to under-perform the Holbrook Structured. In addition to that, Western Asset is 2.34 times more volatile than Holbrook Structured Income. It trades about -0.02 of its total potential returns per unit of risk. Holbrook Structured Income is currently generating about 0.18 per unit of volatility. If you would invest 969.00 in Holbrook Structured Income on September 3, 2024 and sell it today you would earn a total of 13.00 from holding Holbrook Structured Income or generate 1.34% 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. Holbrook Structured Income
Performance |
| Timeline |
| Western Asset Municipal |
| Holbrook Structured |
Western Asset and Holbrook Structured Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Holbrook Structured
The main advantage of trading using opposite Western Asset and Holbrook Structured positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Holbrook Structured 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 Holbrook Structured will offset losses from the drop in Holbrook Structured's long position.| Western Asset vs. Columbia Real Estate | Western Asset vs. Prudential Real Estate | Western Asset vs. Us Real Estate | Western Asset vs. Guggenheim Risk Managed |
| Holbrook Structured vs. Adams Natural Resources | Holbrook Structured vs. Energy Basic Materials | Holbrook Structured vs. Franklin Natural Resources | Holbrook Structured vs. Gmo Resources |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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