Correlation Between Western Asset and Ab Global
Can any of the company-specific risk be diversified away by investing in both Western Asset and Ab Global 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 Ab Global 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 Ab Global Real, you can compare the effects of market volatilities on Western Asset and Ab Global 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 Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Ab Global.
Diversification Opportunities for Western Asset and Ab Global
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and AEEIX is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Ab Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Real 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Real has no effect on the direction of Western Asset i.e., Western Asset and Ab Global go up and down completely randomly.
Pair Corralation between Western Asset and Ab Global
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the Ab Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Diversified is 2.79 times less risky than Ab Global. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Ab Global Real is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,533 in Ab Global Real on September 2, 2024 and sell it today you would earn a total of 23.00 from holding Ab Global Real or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Ab Global Real
Performance |
| Timeline |
| Western Asset Diversified |
| Ab Global Real |
Western Asset and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Ab Global
The main advantage of trading using opposite Western Asset and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Ab Global 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 Ab Global will offset losses from the drop in Ab Global's long position.| Western Asset vs. Morningstar Unconstrained Allocation | Western Asset vs. Old Westbury Large | Western Asset vs. T Rowe Price | Western Asset vs. Enhanced Large Pany |
| Ab Global vs. Nationwide Inflation Protected Securities | Ab Global vs. The Hartford Inflation | Ab Global vs. Cref Inflation Linked Bond | Ab Global vs. Aqr Managed Futures |
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 Stocks Directory module to find actively traded stocks across global markets.
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