Correlation Between Chartwell Short and Western Asset

Can any of the company-specific risk be diversified away by investing in both Chartwell Short and Western Asset 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 Chartwell Short and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chartwell Short Duration and Western Asset Municipal, you can compare the effects of market volatilities on Chartwell Short and Western Asset 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 Chartwell Short with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chartwell Short and Western Asset.

Diversification Opportunities for Chartwell Short and Western Asset

-0.06

Correlation Coefficient

Chartwell Short  Western Asset

Good diversification

The 3 months correlation between Chartwell and Western is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Chartwell Short Duration and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal and Chartwell Short 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 Chartwell Short Duration are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Municipal has no effect on the direction of Chartwell Short i.e., Chartwell Short and Western Asset go up and down completely randomly.

Pair Corralation between Chartwell Short and Western Asset

Assuming the 90 days horizon Chartwell Short Duration is expected to generate 0.36 times more return on investment than Western Asset. However, Chartwell Short Duration is 2.79 times less risky than Western Asset. It trades about 0.2 of its potential returns per unit of risk. Western Asset Municipal is currently generating about -0.06 per unit of risk. If you would invest  942.00  in Chartwell Short Duration on October 25, 2024 and sell it today you would earn a total of  12.00  from holding Chartwell Short Duration or generate 1.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Chartwell Short Duration  vs.  Western Asset Municipal

Chartwell Short Duration

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Chartwell Short Duration has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Chartwell Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Western Asset Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Asset Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Western Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chartwell Short and Western Asset

The main advantage of trading using opposite Chartwell Short and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chartwell Short position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.

The idea behind Chartwell Short Duration and Western Asset Municipal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.