Correlation Between Western Asset and Ab All
Can any of the company-specific risk be diversified away by investing in both Western Asset and Ab All 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 All 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 Ab All Market, you can compare the effects of market volatilities on Western Asset and Ab All 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 All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Ab All.
Diversification Opportunities for Western Asset and Ab All
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and AMTOX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Ab All Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab All Market 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 Ab All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab All Market has no effect on the direction of Western Asset i.e., Western Asset and Ab All go up and down completely randomly.
Pair Corralation between Western Asset and Ab All
Assuming the 90 days horizon Western Asset is expected to generate 2.07 times less return on investment than Ab All. But when comparing it to its historical volatility, Western Asset Municipal is 3.15 times less risky than Ab All. It trades about 0.24 of its potential returns per unit of risk. Ab All Market is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 970.00 in Ab All Market on August 20, 2025 and sell it today you would earn a total of 62.00 from holding Ab All Market or generate 6.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Ab All Market
Performance |
| Timeline |
| Western Asset Municipal |
| Ab All Market |
Western Asset and Ab All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Ab All
The main advantage of trading using opposite Western Asset and Ab All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Ab All 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 All will offset losses from the drop in Ab All's long position.| Western Asset vs. T Rowe Price | Western Asset vs. T Rowe Price | Western Asset vs. Franklin Emerging Market | Western Asset vs. Bbh Intermediate Municipal |
| Ab All vs. Morningstar International Equity | Ab All vs. Rbc China Equity | Ab All vs. Gmo Global Equity | Ab All vs. Dreyfusstandish Global Fixed |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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