Correlation Between Western Asset and Hunter Small
Can any of the company-specific risk be diversified away by investing in both Western Asset and Hunter Small 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 Hunter Small 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 Hunter Small Cap, you can compare the effects of market volatilities on Western Asset and Hunter Small 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 Hunter Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Hunter Small.
Diversification Opportunities for Western Asset and Hunter Small
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Hunter is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Hunter Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunter Small Cap 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 Hunter Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunter Small Cap has no effect on the direction of Western Asset i.e., Western Asset and Hunter Small go up and down completely randomly.
Pair Corralation between Western Asset and Hunter Small
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the Hunter Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Diversified is 2.9 times less risky than Hunter Small. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Hunter Small Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,242 in Hunter Small Cap on November 5, 2024 and sell it today you would earn a total of 32.00 from holding Hunter Small Cap or generate 2.58% 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. Hunter Small Cap
Performance |
| Timeline |
| Western Asset Diversified |
| Hunter Small Cap |
Western Asset and Hunter Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Hunter Small
The main advantage of trading using opposite Western Asset and Hunter Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Hunter Small 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 Hunter Small will offset losses from the drop in Hunter Small's long position.| Western Asset vs. John Hancock Money | Western Asset vs. Prudential Financial Services | Western Asset vs. Fidelity Advisor Financial | Western Asset vs. Angel Oak Financial |
| Hunter Small vs. Firsthand Technology Opportunities | Hunter Small vs. Invesco Technology Fund | Hunter Small vs. Global Technology Portfolio | Hunter Small vs. Blackrock Science Technology |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |