Correlation Between Western Asset and Fidelity Sai
Can any of the company-specific risk be diversified away by investing in both Western Asset and Fidelity Sai 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 Fidelity Sai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Municipal and Fidelity Sai Alternative, you can compare the effects of market volatilities on Western Asset and Fidelity Sai 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 Fidelity Sai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Fidelity Sai.
Diversification Opportunities for Western Asset and Fidelity Sai
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Fidelity is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Fidelity Sai Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Sai Alternative 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 Municipal are associated (or correlated) with Fidelity Sai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Sai Alternative has no effect on the direction of Western Asset i.e., Western Asset and Fidelity Sai go up and down completely randomly.
Pair Corralation between Western Asset and Fidelity Sai
Assuming the 90 days horizon Western Asset Municipal is expected to generate 0.47 times more return on investment than Fidelity Sai. However, Western Asset Municipal is 2.12 times less risky than Fidelity Sai. It trades about 0.1 of its potential returns per unit of risk. Fidelity Sai Alternative is currently generating about -0.1 per unit of risk. If you would invest 722.00 in Western Asset Municipal on June 22, 2024 and sell it today you would earn a total of 18.00 from holding Western Asset Municipal or generate 2.49% 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 Municipal vs. Fidelity Sai Alternative
Performance |
Timeline |
Western Asset Municipal |
Fidelity Sai Alternative |
Western Asset and Fidelity Sai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Western Asset and Fidelity Sai
The main advantage of trading using opposite Western Asset and Fidelity Sai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Fidelity Sai 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 Fidelity Sai will offset losses from the drop in Fidelity Sai'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 |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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