Correlation Between Western Asset and Pioneer Bond
Can any of the company-specific risk be diversified away by investing in both Western Asset and Pioneer Bond 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 Pioneer Bond 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 Pioneer Bond Fund, you can compare the effects of market volatilities on Western Asset and Pioneer Bond 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 Pioneer Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Pioneer Bond.
Diversification Opportunities for Western Asset and Pioneer Bond
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Pioneer is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Pioneer Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Bond 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 Pioneer Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Bond has no effect on the direction of Western Asset i.e., Western Asset and Pioneer Bond go up and down completely randomly.
Pair Corralation between Western Asset and Pioneer Bond
Assuming the 90 days horizon Western Asset is expected to generate 2.73 times less return on investment than Pioneer Bond. But when comparing it to its historical volatility, Western Asset Diversified is 1.04 times less risky than Pioneer Bond. It trades about 0.05 of its potential returns per unit of risk. Pioneer Bond Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 836.00 in Pioneer Bond Fund on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Pioneer Bond Fund or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Pioneer Bond Fund
Performance |
| Timeline |
| Western Asset Diversified |
| Pioneer Bond |
Western Asset and Pioneer Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Pioneer Bond
The main advantage of trading using opposite Western Asset and Pioneer Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Pioneer Bond 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 Pioneer Bond will offset losses from the drop in Pioneer Bond'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 |
| Pioneer Bond vs. Multisector Bond Sma | Pioneer Bond vs. T Rowe Price | Pioneer Bond vs. Dreyfusstandish Global Fixed | Pioneer Bond vs. The National Tax Free |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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