Correlation Between Western Asset and Wcm Mid
Can any of the company-specific risk be diversified away by investing in both Western Asset and Wcm Mid 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 Wcm Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Inflation and Wcm Mid Cap, you can compare the effects of market volatilities on Western Asset and Wcm Mid 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 Wcm Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Wcm Mid.
Diversification Opportunities for Western Asset and Wcm Mid
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Wcm is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Wcm Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wcm Mid Cap 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 Inflation are associated (or correlated) with Wcm Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wcm Mid Cap has no effect on the direction of Western Asset i.e., Western Asset and Wcm Mid go up and down completely randomly.
Pair Corralation between Western Asset and Wcm Mid
Assuming the 90 days horizon Western Asset is expected to generate 4.47 times less return on investment than Wcm Mid. But when comparing it to its historical volatility, Western Asset Inflation is 3.09 times less risky than Wcm Mid. It trades about 0.03 of its potential returns per unit of risk. Wcm Mid Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,157 in Wcm Mid Cap on September 12, 2024 and sell it today you would earn a total of 133.00 from holding Wcm Mid Cap or generate 11.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Western Asset Inflation vs. Wcm Mid Cap
Performance |
Timeline |
Western Asset Inflation |
Wcm Mid Cap |
Western Asset and Wcm Mid Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Asset and Wcm Mid
The main advantage of trading using opposite Western Asset and Wcm Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Wcm Mid 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 Wcm Mid will offset losses from the drop in Wcm Mid's long position.Western Asset vs. Eventide Healthcare Life | Western Asset vs. Live Oak Health | Western Asset vs. Alger Health Sciences | Western Asset vs. Prudential Health Sciences |
Wcm Mid vs. Western Asset Inflation | Wcm Mid vs. Short Duration Inflation | Wcm Mid vs. American Funds Inflation | Wcm Mid vs. Guggenheim Managed Futures |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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