Correlation Between Western Asset and Catalystwarrington
Can any of the company-specific risk be diversified away by investing in both Western Asset and Catalystwarrington 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 Catalystwarrington 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 Catalystwarrington Strategic Program, you can compare the effects of market volatilities on Western Asset and Catalystwarrington 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 Catalystwarrington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Catalystwarrington.
Diversification Opportunities for Western Asset and Catalystwarrington
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Catalystwarrington is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Catalystwarrington Strategic P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystwarrington 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 Catalystwarrington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystwarrington has no effect on the direction of Western Asset i.e., Western Asset and Catalystwarrington go up and down completely randomly.
Pair Corralation between Western Asset and Catalystwarrington
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the Catalystwarrington. In addition to that, Western Asset is 2.14 times more volatile than Catalystwarrington Strategic Program. It trades about -0.02 of its total potential returns per unit of risk. Catalystwarrington Strategic Program is currently generating about 0.09 per unit of volatility. If you would invest 934.00 in Catalystwarrington Strategic Program on September 3, 2024 and sell it today you would earn a total of 14.00 from holding Catalystwarrington Strategic Program or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Catalystwarrington Strategic P
Performance |
| Timeline |
| Western Asset Diversified |
| Catalystwarrington |
Western Asset and Catalystwarrington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Catalystwarrington
The main advantage of trading using opposite Western Asset and Catalystwarrington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Catalystwarrington 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 Catalystwarrington will offset losses from the drop in Catalystwarrington'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 |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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