Correlation Between Western Asset and Artisan High
Can any of the company-specific risk be diversified away by investing in both Western Asset and Artisan High 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 Artisan High 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 Artisan High Income, you can compare the effects of market volatilities on Western Asset and Artisan High 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 Artisan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Artisan High.
Diversification Opportunities for Western Asset and Artisan High
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Artisan is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Artisan High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan High Income 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 Artisan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan High Income has no effect on the direction of Western Asset i.e., Western Asset and Artisan High go up and down completely randomly.
Pair Corralation between Western Asset and Artisan High
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the Artisan High. In addition to that, Western Asset is 1.51 times more volatile than Artisan High Income. It trades about -0.01 of its total potential returns per unit of risk. Artisan High Income is currently generating about 0.21 per unit of volatility. If you would invest 857.00 in Artisan High Income on September 3, 2024 and sell it today you would earn a total of 60.00 from holding Artisan High Income or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Artisan High Income
Performance |
| Timeline |
| Western Asset Diversified |
| Artisan High Income |
Western Asset and Artisan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Artisan High
The main advantage of trading using opposite Western Asset and Artisan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Artisan High 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 Artisan High will offset losses from the drop in Artisan High'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 |
| Artisan High vs. Chase Growth Fund | Artisan High vs. T Rowe Price | Artisan High vs. Qs Moderate Growth | Artisan High vs. Qs Growth Fund |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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