Correlation Between Western Asset and Great-west Lifetime
Can any of the company-specific risk be diversified away by investing in both Western Asset and Great-west Lifetime 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 Great-west Lifetime 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 Great West Lifetime 2025, you can compare the effects of market volatilities on Western Asset and Great-west Lifetime 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 Great-west Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Great-west Lifetime.
Diversification Opportunities for Western Asset and Great-west Lifetime
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and Great-west is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Great West Lifetime 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifetime 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 Great-west Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifetime has no effect on the direction of Western Asset i.e., Western Asset and Great-west Lifetime go up and down completely randomly.
Pair Corralation between Western Asset and Great-west Lifetime
Assuming the 90 days horizon Western Asset is expected to generate 4.74 times less return on investment than Great-west Lifetime. But when comparing it to its historical volatility, Western Asset Diversified is 1.21 times less risky than Great-west Lifetime. It trades about 0.08 of its potential returns per unit of risk. Great West Lifetime 2025 is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,408 in Great West Lifetime 2025 on September 1, 2024 and sell it today you would earn a total of 31.00 from holding Great West Lifetime 2025 or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Great West Lifetime 2025
Performance |
| Timeline |
| Western Asset Diversified |
| Great West Lifetime |
Western Asset and Great-west Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Great-west Lifetime
The main advantage of trading using opposite Western Asset and Great-west Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Great-west Lifetime 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 Great-west Lifetime will offset losses from the drop in Great-west Lifetime'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 |
| Great-west Lifetime vs. Small Cap Stock | Great-west Lifetime vs. Western Asset Diversified | Great-west Lifetime vs. Aqr Diversified Arbitrage | Great-west Lifetime vs. Delaware Limited Term Diversified |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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