Correlation Between Western Asset and Cboe Vest
Can any of the company-specific risk be diversified away by investing in both Western Asset and Cboe Vest 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 Cboe Vest 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 Cboe Vest Bitcoin, you can compare the effects of market volatilities on Western Asset and Cboe Vest 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 Cboe Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Cboe Vest.
Diversification Opportunities for Western Asset and Cboe Vest
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Cboe is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Cboe Vest Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cboe Vest Bitcoin 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 Cboe Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cboe Vest Bitcoin has no effect on the direction of Western Asset i.e., Western Asset and Cboe Vest go up and down completely randomly.
Pair Corralation between Western Asset and Cboe Vest
Assuming the 90 days horizon Western Asset is expected to generate 45.16 times less return on investment than Cboe Vest. But when comparing it to its historical volatility, Western Asset Diversified is 7.96 times less risky than Cboe Vest. It trades about 0.02 of its potential returns per unit of risk. Cboe Vest Bitcoin is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 998.00 in Cboe Vest Bitcoin on August 31, 2024 and sell it today you would earn a total of 2,019 from holding Cboe Vest Bitcoin or generate 202.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Cboe Vest Bitcoin
Performance |
| Timeline |
| Western Asset Diversified |
| Cboe Vest Bitcoin |
Western Asset and Cboe Vest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Cboe Vest
The main advantage of trading using opposite Western Asset and Cboe Vest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Cboe Vest 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 Cboe Vest will offset losses from the drop in Cboe Vest's long position.| Western Asset vs. Davis Financial Fund | Western Asset vs. Prudential Jennison Financial | Western Asset vs. Mesirow Financial Small | Western Asset vs. Fidelity Advisor Financial |
| Cboe Vest vs. American Funds Conservative | Cboe Vest vs. Prudential Core Conservative | Cboe Vest vs. Western Asset Diversified | Cboe Vest vs. Pioneer Diversified High |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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