Correlation Between Western Asset and Jpmorgan Large
Can any of the company-specific risk be diversified away by investing in both Western Asset and Jpmorgan Large 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 Jpmorgan Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Short and Jpmorgan Large Cap, you can compare the effects of market volatilities on Western Asset and Jpmorgan Large 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 Jpmorgan Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Jpmorgan Large.
Diversification Opportunities for Western Asset and Jpmorgan Large
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Jpmorgan is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Short and Jpmorgan Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Large Cap 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 Short are associated (or correlated) with Jpmorgan Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Large Cap has no effect on the direction of Western Asset i.e., Western Asset and Jpmorgan Large go up and down completely randomly.
Pair Corralation between Western Asset and Jpmorgan Large
Assuming the 90 days horizon Western Asset Short is expected to generate 0.11 times more return on investment than Jpmorgan Large. However, Western Asset Short is 8.86 times less risky than Jpmorgan Large. It trades about -0.23 of its potential returns per unit of risk. Jpmorgan Large Cap is currently generating about -0.03 per unit of risk. If you would invest 503.00 in Western Asset Short on October 8, 2024 and sell it today you would lose (3.00) from holding Western Asset Short or give up 0.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Western Asset Short vs. Jpmorgan Large Cap
Performance |
Timeline |
Western Asset Short |
Jpmorgan Large Cap |
Western Asset and Jpmorgan Large Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Asset and Jpmorgan Large
The main advantage of trading using opposite Western Asset and Jpmorgan Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Jpmorgan Large 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 Jpmorgan Large will offset losses from the drop in Jpmorgan Large's long position.Western Asset vs. Asg Global Alternatives | Western Asset vs. Investec Global Franchise | Western Asset vs. Harding Loevner Global | Western Asset vs. Commonwealth Global Fund |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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