Correlation Between Western Asset and Blackrock High
Can any of the company-specific risk be diversified away by investing in both Western Asset and Blackrock 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 Blackrock 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 Blackrock High Income, you can compare the effects of market volatilities on Western Asset and Blackrock 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 Blackrock High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Blackrock High.
Diversification Opportunities for Western Asset and Blackrock High
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Blackrock is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Blackrock High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock 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 Blackrock High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock High Income has no effect on the direction of Western Asset i.e., Western Asset and Blackrock High go up and down completely randomly.
Pair Corralation between Western Asset and Blackrock High
Assuming the 90 days horizon Western Asset is expected to generate 5.57 times less return on investment than Blackrock High. But when comparing it to its historical volatility, Western Asset Diversified is 1.18 times less risky than Blackrock High. It trades about 0.03 of its potential returns per unit of risk. Blackrock High Income is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 690.00 in Blackrock High Income on September 12, 2024 and sell it today you would earn a total of 197.00 from holding Blackrock High Income or generate 28.55% 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. Blackrock High Income
Performance |
| Timeline |
| Western Asset Diversified |
| Blackrock High Income |
Western Asset and Blackrock High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Blackrock High
The main advantage of trading using opposite Western Asset and Blackrock High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Blackrock 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 Blackrock High will offset losses from the drop in Blackrock 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 |
| Blackrock High vs. Allianzgi Diversified Income | Blackrock High vs. Fidelity Advisor Diversified | Blackrock High vs. Wealthbuilder Conservative Allocation | Blackrock High 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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