Correlation Between Western Asset and ETF Securities
Can any of the company-specific risk be diversified away by investing in both Western Asset and ETF Securities 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 ETF Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Global and ETF Securities, you can compare the effects of market volatilities on Western Asset and ETF Securities 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 ETF Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and ETF Securities.
Diversification Opportunities for Western Asset and ETF Securities
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and ETF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and ETF Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Securities 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 Global are associated (or correlated) with ETF Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Securities has no effect on the direction of Western Asset i.e., Western Asset and ETF Securities go up and down completely randomly.
Pair Corralation between Western Asset and ETF Securities
If you would invest (100.00) in ETF Securities on January 26, 2024 and sell it today you would earn a total of 100.00 from holding ETF Securities or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Global vs. ETF Securities
Performance |
| Timeline |
| Western Asset Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| ETF Securities |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Western Asset and ETF Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and ETF Securities
The main advantage of trading using opposite Western Asset and ETF Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, ETF Securities 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 ETF Securities will offset losses from the drop in ETF Securities' long position.| Western Asset vs. The Hartford Healthcare | Western Asset vs. Schwab Health Care | Western Asset vs. Highland Longshort Healthcare | Western Asset vs. Hartford Healthcare Hls |
| ETF Securities vs. Vanguard Total Stock | ETF Securities vs. SPDR SP 500 | ETF Securities vs. iShares Core SP | ETF Securities vs. Vanguard Total Bond |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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