Correlation Between Western Asset and Dfa Commodity
Can any of the company-specific risk be diversified away by investing in both Western Asset and Dfa Commodity 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 Dfa Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Dfa Commodity Strategy, you can compare the effects of market volatilities on Western Asset and Dfa Commodity 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 Dfa Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Dfa Commodity.
Diversification Opportunities for Western Asset and Dfa Commodity
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Dfa is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Dfa Commodity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Commodity 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 Diversified are associated (or correlated) with Dfa Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Commodity Strategy has no effect on the direction of Western Asset i.e., Western Asset and Dfa Commodity go up and down completely randomly.
Pair Corralation between Western Asset and Dfa Commodity
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the Dfa Commodity. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Diversified is 2.27 times less risky than Dfa Commodity. The mutual fund trades about -0.34 of its potential returns per unit of risk. The Dfa Commodity Strategy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 449.00 in Dfa Commodity Strategy on October 4, 2024 and sell it today you would earn a total of 3.00 from holding Dfa Commodity Strategy or generate 0.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Western Asset Diversified vs. Dfa Commodity Strategy
Performance |
Timeline |
Western Asset Diversified |
Dfa Commodity Strategy |
Western Asset and Dfa Commodity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Asset and Dfa Commodity
The main advantage of trading using opposite Western Asset and Dfa Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Dfa Commodity 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 Dfa Commodity will offset losses from the drop in Dfa Commodity's long position.Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
Dfa Commodity vs. Real Estate Fund | Dfa Commodity vs. Columbia Real Estate | Dfa Commodity vs. Simt Real Estate | Dfa Commodity vs. John Hancock Variable |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |