Correlation Between Sa Emerging and Western Assets
Can any of the company-specific risk be diversified away by investing in both Sa Emerging and Western Assets 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 Sa Emerging and Western Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sa Emerging Markets and Western Assets Emerging, you can compare the effects of market volatilities on Sa Emerging and Western Assets 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 Sa Emerging with a short position of Western Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sa Emerging and Western Assets.
Diversification Opportunities for Sa Emerging and Western Assets
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAEMX and Western is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sa Emerging Markets and Western Assets Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Assets Emerging and Sa Emerging 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 Sa Emerging Markets are associated (or correlated) with Western Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Assets Emerging has no effect on the direction of Sa Emerging i.e., Sa Emerging and Western Assets go up and down completely randomly.
Pair Corralation between Sa Emerging and Western Assets
Assuming the 90 days horizon Sa Emerging Markets is expected to under-perform the Western Assets. In addition to that, Sa Emerging is 3.98 times more volatile than Western Assets Emerging. It trades about -0.06 of its total potential returns per unit of risk. Western Assets Emerging is currently generating about -0.07 per unit of volatility. If you would invest 1,121 in Western Assets Emerging on August 28, 2025 and sell it today you would lose (4.00) from holding Western Assets Emerging or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sa Emerging Markets vs. Western Assets Emerging
Performance |
| Timeline |
| Sa Emerging Markets |
| Western Assets Emerging |
Sa Emerging and Western Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sa Emerging and Western Assets
The main advantage of trading using opposite Sa Emerging and Western Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sa Emerging position performs unexpectedly, Western Assets 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 Assets will offset losses from the drop in Western Assets' long position.| Sa Emerging vs. Enhanced Fixed Income | Sa Emerging vs. Western Asset Municipal | Sa Emerging vs. Morningstar Defensive Bond | Sa Emerging vs. Rbc Money Market |
| Western Assets vs. Vanguard Total Stock | Western Assets vs. Vanguard 500 Index | Western Assets vs. Vanguard Total Stock | Western Assets vs. Vanguard Total Stock |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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