Correlation Between Hamilton Lane and Western Asset

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

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

Diversification Opportunities for Hamilton Lane and Western Asset

-0.45

Correlation Coefficient

Hamilton Lane  Western Asset

Very good diversification

The 3 months correlation between Hamilton and Western is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Lane and Western Asset Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Emerging and Hamilton Lane 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 Hamilton Lane 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 Emerging has no effect on the direction of Hamilton Lane i.e., Hamilton Lane and Western Asset go up and down completely randomly.

Pair Corralation between Hamilton Lane and Western Asset

Given the investment horizon of 90 days Hamilton Lane is expected to under-perform the Western Asset. In addition to that, Hamilton Lane is 4.98 times more volatile than Western Asset Emerging. It trades about -0.02 of its total potential returns per unit of risk. Western Asset Emerging is currently generating about 0.36 per unit of volatility. If you would invest  910.00  in Western Asset Emerging on May 7, 2025 and sell it today you would earn a total of  108.00  from holding Western Asset Emerging or generate 11.87% return on investment over 90 days.

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

Hamilton Lane  vs.  Western Asset Emerging

Hamilton Lane

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hamilton Lane has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Hamilton Lane is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Western Asset Emerging

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset Emerging are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak primary indicators, Western Asset may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Hamilton Lane and Western Asset

The main advantage of trading using opposite Hamilton Lane and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hamilton Lane 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 Hamilton Lane and Western Asset Emerging 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.