Correlation Between Western Asset and Ivy Asset
Can any of the company-specific risk be diversified away by investing in both Western Asset and Ivy 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 Western Asset and Ivy Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Mortgage and Ivy Asset Strategy, you can compare the effects of market volatilities on Western Asset and Ivy 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 Western Asset with a short position of Ivy Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Ivy Asset.
Diversification Opportunities for Western Asset and Ivy Asset
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Ivy is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Mortgage and Ivy Asset Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Asset Strategy 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 Mortgage are associated (or correlated) with Ivy Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Asset Strategy has no effect on the direction of Western Asset i.e., Western Asset and Ivy Asset go up and down completely randomly.
Pair Corralation between Western Asset and Ivy Asset
Considering the 90-day investment horizon Western Asset is expected to generate 1.26 times less return on investment than Ivy Asset. But when comparing it to its historical volatility, Western Asset Mortgage is 1.3 times less risky than Ivy Asset. It trades about 0.2 of its potential returns per unit of risk. Ivy Asset Strategy is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,256 in Ivy Asset Strategy on June 3, 2025 and sell it today you would earn a total of 104.00 from holding Ivy Asset Strategy or generate 4.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Mortgage vs. Ivy Asset Strategy
Performance |
| Timeline |
| Western Asset Mortgage |
| Ivy Asset Strategy |
Western Asset and Ivy Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Ivy Asset
The main advantage of trading using opposite Western Asset and Ivy Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Ivy 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 Ivy Asset will offset losses from the drop in Ivy Asset's long position.| Western Asset vs. Western Asset Global | Western Asset vs. Doubleline Opportunistic Credit | Western Asset vs. Brandywineglobal Globalome Opportunities | Western Asset vs. Western Asset Diversified |
| Ivy Asset vs. Abs Insights Emerging | Ivy Asset vs. Ab Select Equity | Ivy Asset vs. Ips Strategic Capital | Ivy Asset vs. Ab Value Fund |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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