Correlation Between Western Asset and William Blair
Can any of the company-specific risk be diversified away by investing in both Western Asset and William Blair 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 William Blair 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 William Blair Small Mid, you can compare the effects of market volatilities on Western Asset and William Blair 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 William Blair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and William Blair.
Diversification Opportunities for Western Asset and William Blair
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and William is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and William Blair Small Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Blair Small 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 William Blair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Blair Small has no effect on the direction of Western Asset i.e., Western Asset and William Blair go up and down completely randomly.
Pair Corralation between Western Asset and William Blair
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the William Blair. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Diversified is 3.44 times less risky than William Blair. The mutual fund trades about -0.04 of its potential returns per unit of risk. The William Blair Small Mid is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,634 in William Blair Small Mid on September 2, 2024 and sell it today you would earn a total of 190.00 from holding William Blair Small Mid or generate 11.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. William Blair Small Mid
Performance |
| Timeline |
| Western Asset Diversified |
| William Blair Small |
Western Asset and William Blair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and William Blair
The main advantage of trading using opposite Western Asset and William Blair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, William Blair 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 William Blair will offset losses from the drop in William Blair's long position.| Western Asset vs. Morningstar Unconstrained Allocation | Western Asset vs. Old Westbury Large | Western Asset vs. T Rowe Price | Western Asset vs. Enhanced Large Pany |
| William Blair vs. T Rowe Price | William Blair vs. Versatile Bond Portfolio | William Blair vs. Multisector Bond Sma | William Blair vs. California Bond Fund |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |