Correlation Between Blackrock Debt and Western Asset
Can any of the company-specific risk be diversified away by investing in both Blackrock Debt 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 Blackrock Debt and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Debt Strategies and Western Asset Global, you can compare the effects of market volatilities on Blackrock Debt 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 Blackrock Debt with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Debt and Western Asset.
Diversification Opportunities for Blackrock Debt and Western Asset
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Blackrock and Western is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Debt Strategies and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Blackrock Debt 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 Blackrock Debt Strategies 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 Global has no effect on the direction of Blackrock Debt i.e., Blackrock Debt and Western Asset go up and down completely randomly.
Pair Corralation between Blackrock Debt and Western Asset
Considering the 90-day investment horizon Blackrock Debt is expected to generate 7.4 times less return on investment than Western Asset. But when comparing it to its historical volatility, Blackrock Debt Strategies is 1.31 times less risky than Western Asset. It trades about 0.02 of its potential returns per unit of risk. Western Asset Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 640.00 in Western Asset Global on December 29, 2024 and sell it today you would earn a total of 25.00 from holding Western Asset Global or generate 3.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Blackrock Debt Strategies vs. Western Asset Global
Performance |
Timeline |
Blackrock Debt Strategies |
Western Asset Global |
Blackrock Debt and Western Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Blackrock Debt and Western Asset
The main advantage of trading using opposite Blackrock Debt and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Debt 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.Blackrock Debt vs. Blackrock Floating Rate | Blackrock Debt vs. Pioneer Floating Rate | Blackrock Debt vs. Eaton Vance Senior | Blackrock Debt vs. Eaton Vance Senior |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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