Correlation Between Western Assets and Strategic Asset

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

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

Diversification Opportunities for Western Assets and Strategic Asset

-0.42

Correlation Coefficient

Western Assets  Strategic Asset

Very good diversification

The 3 months correlation between Western and Strategic is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana and Western Assets 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 Assets Emerging are associated (or correlated) with Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Western Assets i.e., Western Assets and Strategic Asset go up and down completely randomly.

Pair Corralation between Western Assets and Strategic Asset

If you would invest  1,218  in Strategic Asset Management on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Strategic Asset Management or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Western Assets Emerging  vs.  Strategic Asset Management

Western Assets Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

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

Strategic Asset Mana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strategic Asset Management has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Strategic 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 Western Assets and Strategic Asset

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

The idea behind Western Assets Emerging and Strategic Asset Management 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.