Correlation Between Western Asset and Prudential Growth
Can any of the company-specific risk be diversified away by investing in both Western Asset and Prudential Growth 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 Prudential Growth 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 Prudential Growth Allocation, you can compare the effects of market volatilities on Western Asset and Prudential Growth 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 Prudential Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Prudential Growth.
Diversification Opportunities for Western Asset and Prudential Growth
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Prudential is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Prudential Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Growth 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 Prudential Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Growth has no effect on the direction of Western Asset i.e., Western Asset and Prudential Growth go up and down completely randomly.
Pair Corralation between Western Asset and Prudential Growth
If you would invest 1,522 in Western Asset Diversified on September 3, 2024 and sell it today you would earn a total of 27.00 from holding Western Asset Diversified or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Prudential Growth Allocation
Performance |
| Timeline |
| Western Asset Diversified |
| Prudential Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Asset and Prudential Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Prudential Growth
The main advantage of trading using opposite Western Asset and Prudential Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Prudential Growth 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 Prudential Growth will offset losses from the drop in Prudential Growth'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 |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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