Correlation Between Western Asset and Blackrock Balanced
Can any of the company-specific risk be diversified away by investing in both Western Asset and Blackrock Balanced 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 Blackrock Balanced 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 Blackrock Balanced Capital, you can compare the effects of market volatilities on Western Asset and Blackrock Balanced 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 Blackrock Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Blackrock Balanced.
Diversification Opportunities for Western Asset and Blackrock Balanced
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Blackrock is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Blackrock Balanced Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Balanced 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 Blackrock Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Balanced has no effect on the direction of Western Asset i.e., Western Asset and Blackrock Balanced go up and down completely randomly.
Pair Corralation between Western Asset and Blackrock Balanced
Assuming the 90 days horizon Western Asset is expected to generate 9.29 times less return on investment than Blackrock Balanced. But when comparing it to its historical volatility, Western Asset Municipal is 1.93 times less risky than Blackrock Balanced. It trades about 0.02 of its potential returns per unit of risk. Blackrock Balanced Capital is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,058 in Blackrock Balanced Capital on September 14, 2024 and sell it today you would earn a total of 735.00 from holding Blackrock Balanced Capital or generate 35.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Blackrock Balanced Capital
Performance |
| Timeline |
| Western Asset Municipal |
| Blackrock Balanced |
Western Asset and Blackrock Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Blackrock Balanced
The main advantage of trading using opposite Western Asset and Blackrock Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Blackrock Balanced 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 Blackrock Balanced will offset losses from the drop in Blackrock Balanced'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 |
| Blackrock Balanced vs. Western Asset Municipal | Blackrock Balanced vs. Fa 529 Aggressive | Blackrock Balanced vs. Acm Dynamic Opportunity | Blackrock Balanced 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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