Correlation Between Dws Strategic and Western Asset

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

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

Diversification Opportunities for Dws Strategic and Western Asset

0.11

Correlation Coefficient

Dws Strategic  Western Asset

Average diversification

The 3 months correlation between Dws and Western is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dws Strategic Municipal and Western Asset Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Managed and Dws Strategic 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 Dws Strategic Municipal 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 Managed has no effect on the direction of Dws Strategic i.e., Dws Strategic and Western Asset go up and down completely randomly.

Pair Corralation between Dws Strategic and Western Asset

If you would invest  1,007  in Dws Strategic Municipal on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Dws Strategic Municipal or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Dws Strategic Municipal  vs.  Western Asset Managed

Dws Strategic Municipal

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Dws Strategic Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of very inconsistent basic indicators, Dws Strategic displayed solid returns over the last few months and may actually be approaching a breakup point.

Western Asset Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Asset Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable primary indicators, Western Asset is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Dws Strategic and Western Asset

The main advantage of trading using opposite Dws Strategic and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dws Strategic 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 Dws Strategic Municipal and Western Asset Managed 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.