Correlation Between Western Asset and Ab Taxable

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

By analyzing existing cross correlation between Western Asset Middle and Ab Taxable Multi Sector, you can compare the effects of market volatilities on Western Asset and Ab Taxable 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 Ab Taxable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Ab Taxable.

Diversification Opportunities for Western Asset and Ab Taxable

0.0

Correlation Coefficient

Western Asset  Ab Taxable

Pay attention - limited upside

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

Pair Corralation between Western Asset and Ab Taxable

If you would invest (100.00) in Ab Taxable Multi Sector on March 7, 2024 and sell it today you would earn a total of  100.00  from holding Ab Taxable Multi Sector or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Western Asset Middle  vs.  Ab Taxable Multi Sector

Western Asset Middle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Asset Middle has generated negative risk-adjusted returns adding no value to fund investors. 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.

Ab Taxable Multi

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ab Taxable Multi Sector are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ab Taxable 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 Ab Taxable

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

The idea behind Western Asset Middle and Ab Taxable Multi Sector 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.