Correlation Between Western Asset and Equinox Campbell
Can any of the company-specific risk be diversified away by investing in both Western Asset and Equinox Campbell 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 Equinox Campbell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset High and Equinox Campbell Strategy, you can compare the effects of market volatilities on Western Asset and Equinox Campbell 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 Equinox Campbell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Equinox Campbell.
Diversification Opportunities for Western Asset and Equinox Campbell
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Equinox is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Equinox Campbell Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinox Campbell Strategy 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 High are associated (or correlated) with Equinox Campbell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinox Campbell Strategy has no effect on the direction of Western Asset i.e., Western Asset and Equinox Campbell go up and down completely randomly.
Pair Corralation between Western Asset and Equinox Campbell
Assuming the 90 days horizon Western Asset High is expected to generate 0.45 times more return on investment than Equinox Campbell. However, Western Asset High is 2.2 times less risky than Equinox Campbell. It trades about 0.12 of its potential returns per unit of risk. Equinox Campbell Strategy is currently generating about 0.02 per unit of risk. If you would invest 621.00 in Western Asset High on September 24, 2024 and sell it today you would earn a total of 78.00 from holding Western Asset High or generate 12.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Western Asset High vs. Equinox Campbell Strategy
Performance |
Timeline |
Western Asset High |
Equinox Campbell Strategy |
Western Asset and Equinox Campbell Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Asset and Equinox Campbell
The main advantage of trading using opposite Western Asset and Equinox Campbell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Equinox Campbell 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 Equinox Campbell will offset losses from the drop in Equinox Campbell's long position.Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
Equinox Campbell vs. Ppm High Yield | Equinox Campbell vs. Needham Aggressive Growth | Equinox Campbell vs. Western Asset High | Equinox Campbell vs. Siit High Yield |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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