Correlation Between Western Asset and Lifex Inflation
Can any of the company-specific risk be diversified away by investing in both Western Asset and Lifex Inflation 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 Lifex Inflation 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 Lifex Inflation Protected Income, you can compare the effects of market volatilities on Western Asset and Lifex Inflation 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 Lifex Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Lifex Inflation.
Diversification Opportunities for Western Asset and Lifex Inflation
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Lifex is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Lifex Inflation Protected Inco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifex Inflation Prot 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 Lifex Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifex Inflation Prot has no effect on the direction of Western Asset i.e., Western Asset and Lifex Inflation go up and down completely randomly.
Pair Corralation between Western Asset and Lifex Inflation
If you would invest 1,545 in Western Asset Diversified on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Western Asset Diversified or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 52.38% |
| Values | Daily Returns |
Western Asset Diversified vs. Lifex Inflation Protected Inco
Performance |
| Timeline |
| Western Asset Diversified |
| Lifex Inflation Prot |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Asset and Lifex Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Lifex Inflation
The main advantage of trading using opposite Western Asset and Lifex Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Lifex Inflation 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 Lifex Inflation will offset losses from the drop in Lifex Inflation'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 |
| Lifex Inflation vs. Stone Ridge High | Lifex Inflation vs. Fidelity Emerging Asia | Lifex Inflation vs. 1290 High Yield | Lifex Inflation vs. Putnam Short Duration |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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