Correlation Between Bondbloxx ETF and Western Asset

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

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

Diversification Opportunities for Bondbloxx ETF and Western Asset

-0.83

Correlation Coefficient

Bondbloxx ETF  Western Asset

Pay attention - limited upside

The 3 months correlation between Bondbloxx and Western is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Bondbloxx ETF 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 Bondbloxx ETF Trust 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 Global has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Western Asset go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Western Asset

Given the investment horizon of 90 days Bondbloxx ETF Trust is expected to generate 0.06 times more return on investment than Western Asset. However, Bondbloxx ETF Trust is 17.63 times less risky than Western Asset. It trades about 0.6 of its potential returns per unit of risk. Western Asset Global is currently generating about -0.18 per unit of risk. If you would invest  4,979  in Bondbloxx ETF Trust on September 2, 2024 and sell it today you would earn a total of  54.00  from holding Bondbloxx ETF Trust or generate 1.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  Western Asset Global

Bondbloxx ETF Trust

Risk-Adjusted Performance

46 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Bondbloxx ETF Trust are ranked lower than 46 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Bondbloxx ETF is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Western Asset Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Asset Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Western Asset is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Bondbloxx ETF and Western Asset

The main advantage of trading using opposite Bondbloxx ETF and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bondbloxx ETF 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 Bondbloxx ETF Trust and Western Asset Global 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 CEOs Directory module to screen CEOs from public companies around the world.