Correlation Between Western Asset and Kellner Merger
Can any of the company-specific risk be diversified away by investing in both Western Asset and Kellner Merger 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 Kellner Merger 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 Kellner Merger Fund, you can compare the effects of market volatilities on Western Asset and Kellner Merger 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 Kellner Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Kellner Merger.
Diversification Opportunities for Western Asset and Kellner Merger
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Kellner is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Kellner Merger Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellner Merger 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 Kellner Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellner Merger has no effect on the direction of Western Asset i.e., Western Asset and Kellner Merger go up and down completely randomly.
Pair Corralation between Western Asset and Kellner Merger
Assuming the 90 days horizon Western Asset is expected to generate 1.21 times less return on investment than Kellner Merger. In addition to that, Western Asset is 1.55 times more volatile than Kellner Merger Fund. It trades about 0.07 of its total potential returns per unit of risk. Kellner Merger Fund is currently generating about 0.13 per unit of volatility. If you would invest 1,049 in Kellner Merger Fund on September 4, 2024 and sell it today you would earn a total of 5.00 from holding Kellner Merger Fund or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Kellner Merger Fund
Performance |
| Timeline |
| Western Asset Diversified |
| Kellner Merger |
Western Asset and Kellner Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Kellner Merger
The main advantage of trading using opposite Western Asset and Kellner Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Kellner Merger 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 Kellner Merger will offset losses from the drop in Kellner Merger'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 |
| Kellner Merger vs. Kellner Merger Fund | Kellner Merger vs. Artisan High Income | Kellner Merger vs. Tiaa Cref Large Cap Growth | Kellner Merger vs. Vanguard 500 Index |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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