Correlation Between Fisher Investments and Western Asset

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

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

Diversification Opportunities for Fisher Investments and Western Asset

-0.12

Correlation Coefficient

Fisher Investments  Western Asset

Good diversification

The 3 months correlation between Fisher and Western is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Large Cap and Western Asset Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Interm and Fisher Investments 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 Fisher Large Cap 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 Interm has no effect on the direction of Fisher Investments i.e., Fisher Investments and Western Asset go up and down completely randomly.

Pair Corralation between Fisher Investments and Western Asset

Assuming the 90 days horizon Fisher Large Cap is expected to generate 3.87 times more return on investment than Western Asset. However, Fisher Investments is 3.87 times more volatile than Western Asset Intermediate. It trades about 0.09 of its potential returns per unit of risk. Western Asset Intermediate is currently generating about 0.03 per unit of risk. If you would invest  1,466  in Fisher Large Cap on October 7, 2024 and sell it today you would earn a total of  333.00  from holding Fisher Large Cap or generate 22.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Fisher Large Cap  vs.  Western Asset Intermediate

Fisher Investments

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Large Cap are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fisher Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Western Asset Interm

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Asset Intermediate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong 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 Fisher Investments and Western Asset

The main advantage of trading using opposite Fisher Investments and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Investments 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 Fisher Large Cap and Western Asset Intermediate 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.