Correlation Between Western Asset and Us Global

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

Diversification Opportunities for Western Asset and Us Global

0.0

Correlation Coefficient

Western Asset  Us Global

Pay attention - limited upside

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

Pair Corralation between Western Asset and Us Global

Assuming the 90 days horizon Western Asset High is expected to generate 0.12 times more return on investment than Us Global. However, Western Asset High is 8.44 times less risky than Us Global. It trades about 0.12 of its potential returns per unit of risk. Us Global Leaders is currently generating about -0.11 per unit of risk. If you would invest  691.00  in Western Asset High on October 22, 2024 and sell it today you would earn a total of  11.00  from holding Western Asset High or generate 1.59% return on investment over 90 days.

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

Western Asset High  vs.  Us Global Leaders

Western Asset High

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset High are ranked lower than 9 (%) 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.

Us Global Leaders

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Us Global Leaders has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's essential indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Western Asset and Us Global

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

The idea behind Western Asset High and Us Global Leaders 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.