Correlation Between Western Asset and Ridgeworth Ceredex
Can any of the company-specific risk be diversified away by investing in both Western Asset and Ridgeworth Ceredex 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 Ridgeworth Ceredex 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 Ridgeworth Ceredex Mid Cap, you can compare the effects of market volatilities on Western Asset and Ridgeworth Ceredex 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 Ridgeworth Ceredex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Ridgeworth Ceredex.
Diversification Opportunities for Western Asset and Ridgeworth Ceredex
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Ridgeworth is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Ridgeworth Ceredex Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ridgeworth Ceredex Mid 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 Ridgeworth Ceredex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ridgeworth Ceredex Mid has no effect on the direction of Western Asset i.e., Western Asset and Ridgeworth Ceredex go up and down completely randomly.
Pair Corralation between Western Asset and Ridgeworth Ceredex
Assuming the 90 days horizon Western Asset Municipal is expected to under-perform the Ridgeworth Ceredex. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Municipal is 3.41 times less risky than Ridgeworth Ceredex. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Ridgeworth Ceredex Mid Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,079 in Ridgeworth Ceredex Mid Cap on September 19, 2024 and sell it today you would earn a total of 208.00 from holding Ridgeworth Ceredex Mid Cap or generate 19.28% 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. Ridgeworth Ceredex Mid Cap
Performance |
| Timeline |
| Western Asset Municipal |
| Ridgeworth Ceredex Mid |
Western Asset and Ridgeworth Ceredex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Ridgeworth Ceredex
The main advantage of trading using opposite Western Asset and Ridgeworth Ceredex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Ridgeworth Ceredex 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 Ridgeworth Ceredex will offset losses from the drop in Ridgeworth Ceredex'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 |
| Ridgeworth Ceredex vs. Dreyfusstandish Global Fixed | Ridgeworth Ceredex vs. Ambrus Core Bond | Ridgeworth Ceredex vs. Western Asset Municipal | Ridgeworth Ceredex vs. Dws Government Money |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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