Correlation Between Western Asset and Rbc Bluebay
Can any of the company-specific risk be diversified away by investing in both Western Asset and Rbc Bluebay 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 Rbc Bluebay 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 Rbc Bluebay Core, you can compare the effects of market volatilities on Western Asset and Rbc Bluebay 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 Rbc Bluebay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Rbc Bluebay.
Diversification Opportunities for Western Asset and Rbc Bluebay
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Rbc is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Rbc Bluebay Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Bluebay Core 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 Rbc Bluebay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Bluebay Core has no effect on the direction of Western Asset i.e., Western Asset and Rbc Bluebay go up and down completely randomly.
Pair Corralation between Western Asset and Rbc Bluebay
Assuming the 90 days horizon Western Asset is expected to generate 3.08 times less return on investment than Rbc Bluebay. But when comparing it to its historical volatility, Western Asset Diversified is 1.58 times less risky than Rbc Bluebay. It trades about 0.05 of its potential returns per unit of risk. Rbc Bluebay Core is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 894.00 in Rbc Bluebay Core on August 31, 2024 and sell it today you would earn a total of 9.00 from holding Rbc Bluebay Core or generate 1.01% 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. Rbc Bluebay Core
Performance |
| Timeline |
| Western Asset Diversified |
| Rbc Bluebay Core |
Western Asset and Rbc Bluebay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Rbc Bluebay
The main advantage of trading using opposite Western Asset and Rbc Bluebay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Rbc Bluebay 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 Rbc Bluebay will offset losses from the drop in Rbc Bluebay's long position.| Western Asset vs. Davis Financial Fund | Western Asset vs. Prudential Jennison Financial | Western Asset vs. Mesirow Financial Small | Western Asset vs. Fidelity Advisor Financial |
| Rbc Bluebay vs. Nuveen Minnesota Municipal | Rbc Bluebay vs. Nuveen Arizona Municipal | Rbc Bluebay vs. T Rowe Price | Rbc Bluebay vs. Old Westbury Municipal |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |