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 Adjustable, 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

-0.55

Correlation Coefficient

Bondbloxx ETF  Western Asset

Excellent diversification

The 3 months correlation between Bondbloxx and Western is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and Western Asset Adjustable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Adjustable 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 Adjustable 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 is expected to generate 1.11 times less return on investment than Western Asset. In addition to that, Bondbloxx ETF is 1.84 times more volatile than Western Asset Adjustable. It trades about 0.15 of its total potential returns per unit of risk. Western Asset Adjustable is currently generating about 0.31 per unit of volatility. If you would invest  846.00  in Western Asset Adjustable on September 12, 2024 and sell it today you would earn a total of  65.00  from holding Western Asset Adjustable or generate 7.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.7%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  Western Asset Adjustable

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

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

Western Asset Adjustable

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset Adjustable are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Western 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 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 Adjustable 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.