Correlation Between Western Asset and Thrivent Large
Can any of the company-specific risk be diversified away by investing in both Western Asset and Thrivent Large 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 Thrivent Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Thrivent Large Cap, you can compare the effects of market volatilities on Western Asset and Thrivent Large 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 Thrivent Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Thrivent Large.
Diversification Opportunities for Western Asset and Thrivent Large
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Thrivent is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Thrivent Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Large Cap 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 Diversified are associated (or correlated) with Thrivent Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Large Cap has no effect on the direction of Western Asset i.e., Western Asset and Thrivent Large go up and down completely randomly.
Pair Corralation between Western Asset and Thrivent Large
Assuming the 90 days horizon Western Asset Diversified is expected to generate 0.2 times more return on investment than Thrivent Large. However, Western Asset Diversified is 5.01 times less risky than Thrivent Large. It trades about 0.18 of its potential returns per unit of risk. Thrivent Large Cap is currently generating about -0.01 per unit of risk. If you would invest 1,514 in Western Asset Diversified on October 22, 2024 and sell it today you would earn a total of 11.00 from holding Western Asset Diversified or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Thrivent Large Cap
Performance |
| Timeline |
| Western Asset Diversified |
| Thrivent Large Cap |
Western Asset and Thrivent Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Thrivent Large
The main advantage of trading using opposite Western Asset and Thrivent Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Thrivent Large 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 Thrivent Large will offset losses from the drop in Thrivent Large's long position.| Western Asset vs. Aqr Sustainable Long Short | Western Asset vs. Aamhimco Short Duration | Western Asset vs. Baird Short Term Bond | Western Asset vs. Jhancock 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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