Correlation Between Western Asset and Westwood Opportunistic
Can any of the company-specific risk be diversified away by investing in both Western Asset and Westwood Opportunistic 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 Westwood Opportunistic 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 Westwood Opportunistic High, you can compare the effects of market volatilities on Western Asset and Westwood Opportunistic 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 Westwood Opportunistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Westwood Opportunistic.
Diversification Opportunities for Western Asset and Westwood Opportunistic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Westwood is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Westwood Opportunistic High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood Opportunistic 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 Westwood Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood Opportunistic has no effect on the direction of Western Asset i.e., Western Asset and Westwood Opportunistic go up and down completely randomly.
Pair Corralation between Western Asset and Westwood Opportunistic
If you would invest 1,541 in Western Asset Diversified on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Western Asset Diversified or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Westwood Opportunistic High
Performance |
| Timeline |
| Western Asset Diversified |
| Westwood Opportunistic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Asset and Westwood Opportunistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Westwood Opportunistic
The main advantage of trading using opposite Western Asset and Westwood Opportunistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Westwood Opportunistic 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 Westwood Opportunistic will offset losses from the drop in Westwood Opportunistic'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 |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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