Correlation Between Western Asset and Mydestination 2055
Can any of the company-specific risk be diversified away by investing in both Western Asset and Mydestination 2055 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 Mydestination 2055 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 Mydestination 2055 Fund, you can compare the effects of market volatilities on Western Asset and Mydestination 2055 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 Mydestination 2055. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Mydestination 2055.
Diversification Opportunities for Western Asset and Mydestination 2055
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Mydestination is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Mydestination 2055 Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mydestination 2055 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 Mydestination 2055. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mydestination 2055 has no effect on the direction of Western Asset i.e., Western Asset and Mydestination 2055 go up and down completely randomly.
Pair Corralation between Western Asset and Mydestination 2055
Assuming the 90 days horizon Western Asset is expected to generate 6.7 times less return on investment than Mydestination 2055. But when comparing it to its historical volatility, Western Asset Diversified is 2.01 times less risky than Mydestination 2055. It trades about 0.08 of its potential returns per unit of risk. Mydestination 2055 Fund is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,769 in Mydestination 2055 Fund on September 1, 2024 and sell it today you would earn a total of 55.00 from holding Mydestination 2055 Fund or generate 3.11% 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. Mydestination 2055 Fund
Performance |
| Timeline |
| Western Asset Diversified |
| Mydestination 2055 |
Western Asset and Mydestination 2055 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Mydestination 2055
The main advantage of trading using opposite Western Asset and Mydestination 2055 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Mydestination 2055 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 Mydestination 2055 will offset losses from the drop in Mydestination 2055'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 |
| Mydestination 2055 vs. Tax Managed Large Cap | Mydestination 2055 vs. Aqr Large Cap | Mydestination 2055 vs. Dana Large Cap | Mydestination 2055 vs. Touchstone Large Cap |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |