Correlation Between Western Asset and Bull Profund
Can any of the company-specific risk be diversified away by investing in both Western Asset and Bull Profund 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 Bull Profund 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 Bull Profund Bull, you can compare the effects of market volatilities on Western Asset and Bull Profund 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 Bull Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Bull Profund.
Diversification Opportunities for Western Asset and Bull Profund
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Bull is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Bull Profund Bull in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bull Profund Bull 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 Bull Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bull Profund Bull has no effect on the direction of Western Asset i.e., Western Asset and Bull Profund go up and down completely randomly.
Pair Corralation between Western Asset and Bull Profund
Assuming the 90 days horizon Western Asset is expected to generate 8.78 times less return on investment than Bull Profund. But when comparing it to its historical volatility, Western Asset Diversified is 2.37 times less risky than Bull Profund. It trades about 0.04 of its potential returns per unit of risk. Bull Profund Bull is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,452 in Bull Profund Bull on September 4, 2024 and sell it today you would earn a total of 1,242 from holding Bull Profund Bull or generate 27.9% 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. Bull Profund Bull
Performance |
| Timeline |
| Western Asset Diversified |
| Bull Profund Bull |
Western Asset and Bull Profund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Bull Profund
The main advantage of trading using opposite Western Asset and Bull Profund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Bull Profund 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 Bull Profund will offset losses from the drop in Bull Profund's long position.| Western Asset vs. Dreyfusstandish Global Fixed | Western Asset vs. Franklin Mutual Global | Western Asset vs. Commonwealth Global Fund | Western Asset vs. Scharf Global Opportunity |
| Bull Profund vs. Morningstar Aggressive Growth | Bull Profund vs. Pace High Yield | Bull Profund vs. Needham Aggressive Growth | Bull Profund vs. Calvert High Yield |
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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