Correlation Between Western Asset and Aristotle Small
Can any of the company-specific risk be diversified away by investing in both Western Asset and Aristotle Small 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 Aristotle Small 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 Aristotle Small Cap, you can compare the effects of market volatilities on Western Asset and Aristotle Small 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 Aristotle Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Aristotle Small.
Diversification Opportunities for Western Asset and Aristotle Small
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Aristotle is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Aristotle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Small 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 Aristotle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Small Cap has no effect on the direction of Western Asset i.e., Western Asset and Aristotle Small go up and down completely randomly.
Pair Corralation between Western Asset and Aristotle Small
If you would invest 1,539 in Western Asset Diversified on September 1, 2024 and sell it today you would earn a total of 7.00 from holding Western Asset Diversified or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Western Asset Diversified vs. Aristotle Small Cap
Performance |
| Timeline |
| Western Asset Diversified |
| Aristotle Small Cap |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Asset and Aristotle Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Aristotle Small
The main advantage of trading using opposite Western Asset and Aristotle Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Aristotle Small 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 Aristotle Small will offset losses from the drop in Aristotle Small'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 |
| Aristotle Small vs. T Rowe Price | Aristotle Small vs. Harbor Diversified International | Aristotle Small vs. Principal Lifetime Hybrid | Aristotle Small 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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