Correlation Between Western Asset and Worldwide Restaurant

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

By analyzing existing cross correlation between Western Asset Investment and Worldwide Restaurant Concepts, you can compare the effects of market volatilities on Western Asset and Worldwide Restaurant 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 Worldwide Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Worldwide Restaurant.

Diversification Opportunities for Western Asset and Worldwide Restaurant

0.0

Correlation Coefficient

Western Asset  Worldwide Restaurant

Pay attention - limited upside

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

Pair Corralation between Western Asset and Worldwide Restaurant

If you would invest  1,479  in Western Asset Investment on October 1, 2024 and sell it today you would earn a total of  141.00  from holding Western Asset Investment or generate 9.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.35%
Values	Daily Returns

Western Asset Investment  vs.  Worldwide Restaurant Concepts

Western Asset Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Asset Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Worldwide Restaurant

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Worldwide Restaurant Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Worldwide Restaurant 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 Worldwide Restaurant

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

The idea behind Western Asset Investment and Worldwide Restaurant Concepts 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.