Correlation Between Western Asset and Simt Multi-asset
Can any of the company-specific risk be diversified away by investing in both Western Asset and Simt Multi-asset 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 Simt Multi-asset 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 Simt Multi Asset Accumulation, you can compare the effects of market volatilities on Western Asset and Simt Multi-asset 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 Simt Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Simt Multi-asset.
Diversification Opportunities for Western Asset and Simt Multi-asset
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and Simt is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Simt Multi Asset Accumulation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset 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 Simt Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Asset has no effect on the direction of Western Asset i.e., Western Asset and Simt Multi-asset go up and down completely randomly.
Pair Corralation between Western Asset and Simt Multi-asset
Assuming the 90 days horizon Western Asset is expected to generate 5.18 times less return on investment than Simt Multi-asset. But when comparing it to its historical volatility, Western Asset Diversified is 1.97 times less risky than Simt Multi-asset. It trades about 0.09 of its potential returns per unit of risk. Simt Multi Asset Accumulation is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 725.00 in Simt Multi Asset Accumulation on November 28, 2024 and sell it today you would earn a total of 15.00 from holding Simt Multi Asset Accumulation or generate 2.07% 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. Simt Multi Asset Accumulation
Performance |
| Timeline |
| Western Asset Diversified |
| Simt Multi Asset |
Western Asset and Simt Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Simt Multi-asset
The main advantage of trading using opposite Western Asset and Simt Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Simt Multi-asset 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 Simt Multi-asset will offset losses from the drop in Simt Multi-asset's long position.| Western Asset vs. T Rowe Price | Western Asset vs. Nationwide E Plus | Western Asset vs. Baird Quality Intermediate | Western Asset vs. Barings Active Short |
| Simt Multi-asset vs. Rbc Bluebay Emerging | Simt Multi-asset vs. Barings Active Short | Simt Multi-asset vs. Touchstone Ultra Short | Simt Multi-asset vs. Baird Quality Intermediate |
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.
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