Correlation Between Western Asset and Strategic Advisers

Can any of the company-specific risk be diversified away by investing in both Western Asset and Strategic Advisers 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 Strategic Advisers 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 Strategic Advisers Income, you can compare the effects of market volatilities on Western Asset and Strategic Advisers 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 Strategic Advisers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Strategic Advisers.

Diversification Opportunities for Western Asset and Strategic Advisers

0.0

Correlation Coefficient

Western Asset  Strategic Advisers

Pay attention - limited upside

The 3 months correlation between Western and Strategic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Strategic Advisers Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Advisers Income 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 Strategic Advisers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Advisers Income has no effect on the direction of Western Asset i.e., Western Asset and Strategic Advisers go up and down completely randomly.

Pair Corralation between Western Asset and Strategic Advisers

If you would invest  697.00  in Western Asset High on December 2, 2024 and sell it today you would earn a total of  10.00  from holding Western Asset High or generate 1.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Western Asset High  vs.  Strategic Advisers Income

Western Asset High

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset High are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Western Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Strategic Advisers Income

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Western Asset and Strategic Advisers

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

The idea behind Western Asset High and Strategic Advisers Income 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.