Correlation Between Western Asset and Upright Assets
Can any of the company-specific risk be diversified away by investing in both Western Asset and Upright Assets 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 Upright Assets 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 Upright Assets Allocation, you can compare the effects of market volatilities on Western Asset and Upright Assets 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 Upright Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Upright Assets.
Diversification Opportunities for Western Asset and Upright Assets
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Upright is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Upright Assets Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upright Assets Allocation 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 Upright Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upright Assets Allocation has no effect on the direction of Western Asset i.e., Western Asset and Upright Assets go up and down completely randomly.
Pair Corralation between Western Asset and Upright Assets
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the Upright Assets. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Diversified is 4.93 times less risky than Upright Assets. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Upright Assets Allocation is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,055 in Upright Assets Allocation on October 18, 2024 and sell it today you would earn a total of 306.00 from holding Upright Assets Allocation or generate 29.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Upright Assets Allocation
Performance |
| Timeline |
| Western Asset Diversified |
| Upright Assets Allocation |
Western Asset and Upright Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Upright Assets
The main advantage of trading using opposite Western Asset and Upright Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Upright Assets 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 Upright Assets will offset losses from the drop in Upright Assets' long position.| Western Asset vs. Lord Abbett Inflation | Western Asset vs. Inflation Protected Bond Fund | Western Asset vs. Ab Bond Inflation | Western Asset vs. American Funds Inflation |
| Upright Assets vs. Vest Large Cap | Upright Assets vs. Dodge Cox Stock | Upright Assets vs. Large Cap Growth Profund | Upright Assets vs. Calvert Large Cap |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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