Correlation Between Western Asset and Blackrock New
Can any of the company-specific risk be diversified away by investing in both Western Asset and Blackrock New 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 New 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 New Jersey, you can compare the effects of market volatilities on Western Asset and Blackrock New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Blackrock New.
Diversification Opportunities for Western Asset and Blackrock New
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Blackrock is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Blackrock New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock New Jersey 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock New Jersey has no effect on the direction of Western Asset i.e., Western Asset and Blackrock New go up and down completely randomly.
Pair Corralation between Western Asset and Blackrock New
Assuming the 90 days horizon Western Asset is expected to generate 2.99 times less return on investment than Blackrock New. In addition to that, Western Asset is 1.08 times more volatile than Blackrock New Jersey. It trades about 0.03 of its total potential returns per unit of risk. Blackrock New Jersey is currently generating about 0.08 per unit of volatility. If you would invest 939.00 in Blackrock New Jersey on September 12, 2024 and sell it today you would earn a total of 102.00 from holding Blackrock New Jersey or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Blackrock New Jersey
Performance |
| Timeline |
| Western Asset Municipal |
| Blackrock New Jersey |
Western Asset and Blackrock New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Blackrock New
The main advantage of trading using opposite Western Asset and Blackrock New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Blackrock New 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 New will offset losses from the drop in Blackrock New's long position.| Western Asset vs. Barings Active Short | Western Asset vs. Cmg Ultra Short | Western Asset vs. Blackrock Short Term Inflat Protected | Western Asset vs. Rbc Short Duration |
| Blackrock New vs. Balanced Fund Investor | Blackrock New vs. T Rowe Price | Blackrock New vs. Western Asset Municipal | Blackrock New vs. Aam Select Income |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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