Correlation Between Western Asset and Allianzgi Nfj
Can any of the company-specific risk be diversified away by investing in both Western Asset and Allianzgi Nfj 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 Allianzgi Nfj 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 Allianzgi Nfj International, you can compare the effects of market volatilities on Western Asset and Allianzgi Nfj 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 Allianzgi Nfj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Allianzgi Nfj.
Diversification Opportunities for Western Asset and Allianzgi Nfj
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Western and Allianzgi is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Allianzgi Nfj International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Nfj Intern 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 Allianzgi Nfj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Nfj Intern has no effect on the direction of Western Asset i.e., Western Asset and Allianzgi Nfj go up and down completely randomly.
Pair Corralation between Western Asset and Allianzgi Nfj
Assuming the 90 days horizon Western Asset Diversified is expected to generate 0.38 times more return on investment than Allianzgi Nfj. However, Western Asset Diversified is 2.66 times less risky than Allianzgi Nfj. It trades about 0.01 of its potential returns per unit of risk. Allianzgi Nfj International is currently generating about 0.0 per unit of risk. If you would invest 1,531 in Western Asset Diversified on September 12, 2024 and sell it today you would earn a total of 22.00 from holding Western Asset Diversified or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Allianzgi Nfj International
Performance |
| Timeline |
| Western Asset Diversified |
| Allianzgi Nfj Intern |
Western Asset and Allianzgi Nfj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Allianzgi Nfj
The main advantage of trading using opposite Western Asset and Allianzgi Nfj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Allianzgi Nfj 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 Allianzgi Nfj will offset losses from the drop in Allianzgi Nfj'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 |
| Allianzgi Nfj vs. Wasatch Small Cap | Allianzgi Nfj vs. Sentinel Small Pany | Allianzgi Nfj vs. Pimco Diversified Income | Allianzgi Nfj vs. Western Asset Diversified |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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