Correlation Between Western Asset and Sa Real
Can any of the company-specific risk be diversified away by investing in both Western Asset and Sa Real 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 Sa Real 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 Sa Real Estate, you can compare the effects of market volatilities on Western Asset and Sa Real 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 Sa Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Sa Real.
Diversification Opportunities for Western Asset and Sa Real
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and SAREX is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Sa Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Real Estate 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 Sa Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Real Estate has no effect on the direction of Western Asset i.e., Western Asset and Sa Real go up and down completely randomly.
Pair Corralation between Western Asset and Sa Real
Assuming the 90 days horizon Western Asset Diversified is expected to generate 0.2 times more return on investment than Sa Real. However, Western Asset Diversified is 5.1 times less risky than Sa Real. It trades about -0.13 of its potential returns per unit of risk. Sa Real Estate is currently generating about -0.17 per unit of risk. If you would invest 1,555 in Western Asset Diversified on September 22, 2024 and sell it today you would lose (23.00) from holding Western Asset Diversified or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Sa Real Estate
Performance |
| Timeline |
| Western Asset Diversified |
| Sa Real Estate |
Western Asset and Sa Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Sa Real
The main advantage of trading using opposite Western Asset and Sa Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Sa Real 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 Sa Real will offset losses from the drop in Sa Real'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 |
| Sa Real vs. Tiaa Cref Small Cap Blend | Sa Real vs. Sentinel Small Pany | Sa Real vs. Lord Abbett Diversified | Sa Real 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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