Correlation Between Western Asset and Blrc Sgy
Can any of the company-specific risk be diversified away by investing in both Western Asset and Blrc Sgy 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 Blrc Sgy 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 Blrc Sgy Mnp, you can compare the effects of market volatilities on Western Asset and Blrc Sgy 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 Blrc Sgy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Blrc Sgy.
Diversification Opportunities for Western Asset and Blrc Sgy
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Blrc is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Blrc Sgy Mnp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blrc Sgy Mnp 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 Blrc Sgy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blrc Sgy Mnp has no effect on the direction of Western Asset i.e., Western Asset and Blrc Sgy go up and down completely randomly.
Pair Corralation between Western Asset and Blrc Sgy
Assuming the 90 days horizon Western Asset Municipal is expected to under-perform the Blrc Sgy. In addition to that, Western Asset is 1.12 times more volatile than Blrc Sgy Mnp. It trades about -0.08 of its total potential returns per unit of risk. Blrc Sgy Mnp is currently generating about 0.04 per unit of volatility. If you would invest 1,051 in Blrc Sgy Mnp on November 3, 2024 and sell it today you would earn a total of 2.00 from holding Blrc Sgy Mnp or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Blrc Sgy Mnp
Performance |
| Timeline |
| Western Asset Municipal |
| Blrc Sgy Mnp |
Western Asset and Blrc Sgy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Blrc Sgy
The main advantage of trading using opposite Western Asset and Blrc Sgy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Blrc Sgy 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 Blrc Sgy will offset losses from the drop in Blrc Sgy's long position.| Western Asset vs. Rational Strategic Allocation | Western Asset vs. Pnc Balanced Allocation | Western Asset vs. Growth Portfolio Class | Western Asset vs. Morningstar Global Income |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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