Correlation Between Western Asset and Blackrock Funds
Can any of the company-specific risk be diversified away by investing in both Western Asset and Blackrock Funds 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 Funds 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 Funds , you can compare the effects of market volatilities on Western Asset and Blackrock Funds 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 Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Blackrock Funds.
Diversification Opportunities for Western Asset and Blackrock Funds
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Blackrock is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Blackrock Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Funds 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 Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Funds has no effect on the direction of Western Asset i.e., Western Asset and Blackrock Funds go up and down completely randomly.
Pair Corralation between Western Asset and Blackrock Funds
Assuming the 90 days horizon Western Asset is expected to generate 7.78 times less return on investment than Blackrock Funds. But when comparing it to its historical volatility, Western Asset Municipal is 3.04 times less risky than Blackrock Funds. It trades about 0.02 of its potential returns per unit of risk. Blackrock Funds is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 946.00 in Blackrock Funds on September 14, 2024 and sell it today you would earn a total of 224.00 from holding Blackrock Funds or generate 23.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 87.04% |
| Values | Daily Returns |
Western Asset Municipal vs. Blackrock Funds
Performance |
| Timeline |
| Western Asset Municipal |
| Blackrock Funds |
Western Asset and Blackrock Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Blackrock Funds
The main advantage of trading using opposite Western Asset and Blackrock Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Blackrock Funds 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 Funds will offset losses from the drop in Blackrock Funds' 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 Funds vs. Western Asset Municipal | Blackrock Funds vs. Versatile Bond Portfolio | Blackrock Funds vs. Pace High Yield | Blackrock Funds vs. Ab Global Bond |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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