Correlation Between Western Asset and Siit Emerging
Can any of the company-specific risk be diversified away by investing in both Western Asset and Siit Emerging 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 Siit Emerging 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 Siit Emerging Markets, you can compare the effects of market volatilities on Western Asset and Siit Emerging 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 Siit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Siit Emerging.
Diversification Opportunities for Western Asset and Siit Emerging
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Siit is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Siit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Emerging Markets 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 Siit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Emerging Markets has no effect on the direction of Western Asset i.e., Western Asset and Siit Emerging go up and down completely randomly.
Pair Corralation between Western Asset and Siit Emerging
Assuming the 90 days horizon Western Asset is expected to generate 2.28 times less return on investment than Siit Emerging. But when comparing it to its historical volatility, Western Asset Municipal is 1.07 times less risky than Siit Emerging. It trades about 0.16 of its potential returns per unit of risk. Siit Emerging Markets is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 901.00 in Siit Emerging Markets on September 4, 2025 and sell it today you would earn a total of 46.00 from holding Siit Emerging Markets or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Siit Emerging Markets
Performance |
| Timeline |
| Western Asset Municipal |
| Siit Emerging Markets |
Western Asset and Siit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Siit Emerging
The main advantage of trading using opposite Western Asset and Siit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Siit Emerging 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 Siit Emerging will offset losses from the drop in Siit Emerging's long position.| Western Asset vs. Bbh Intermediate Municipal | Western Asset vs. Federated Municipal High | Western Asset vs. Old Westbury Municipal | Western Asset vs. Performance Trust Municipal |
| Siit Emerging vs. Simt Multi Asset Accumulation | Siit Emerging vs. Saat Market Growth | Siit Emerging vs. Simt Real Return | Siit Emerging vs. Simt Small Cap |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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