Correlation Between Western Asset and Saat Moderate
Can any of the company-specific risk be diversified away by investing in both Western Asset and Saat Moderate 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 Saat Moderate 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 Saat Moderate Strategy, you can compare the effects of market volatilities on Western Asset and Saat Moderate 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 Saat Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Saat Moderate.
Diversification Opportunities for Western Asset and Saat Moderate
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Saat is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Saat Moderate Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Moderate Strategy 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 Saat Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Moderate Strategy has no effect on the direction of Western Asset i.e., Western Asset and Saat Moderate go up and down completely randomly.
Pair Corralation between Western Asset and Saat Moderate
Assuming the 90 days horizon Western Asset Municipal is expected to generate 1.14 times more return on investment than Saat Moderate. However, Western Asset is 1.14 times more volatile than Saat Moderate Strategy. It trades about 0.23 of its potential returns per unit of risk. Saat Moderate Strategy is currently generating about 0.21 per unit of risk. If you would invest 726.00 in Western Asset Municipal on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Western Asset Municipal or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Saat Moderate Strategy
Performance |
| Timeline |
| Western Asset Municipal |
| Saat Moderate Strategy |
Western Asset and Saat Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Saat Moderate
The main advantage of trading using opposite Western Asset and Saat Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Saat Moderate 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 Saat Moderate will offset losses from the drop in Saat Moderate'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 |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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