Correlation Between CCSB Financial and Western Asset
Can any of the company-specific risk be diversified away by investing in both CCSB Financial and Western 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 CCSB Financial and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCSB Financial Corp and Western Asset Investment, you can compare the effects of market volatilities on CCSB Financial and Western 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 CCSB Financial with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCSB Financial and Western Asset.
Diversification Opportunities for CCSB Financial and Western Asset
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CCSB and Western is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CCSB Financial Corp and Western Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Investment and CCSB Financial 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 CCSB Financial Corp are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Investment has no effect on the direction of CCSB Financial i.e., CCSB Financial and Western Asset go up and down completely randomly.
Pair Corralation between CCSB Financial and Western Asset
Given the investment horizon of 90 days CCSB Financial Corp is expected to under-perform the Western Asset. In addition to that, CCSB Financial is 2.8 times more volatile than Western Asset Investment. It trades about -0.02 of its total potential returns per unit of risk. Western Asset Investment is currently generating about 0.03 per unit of volatility. If you would invest 1,496 in Western Asset Investment on September 12, 2024 and sell it today you would earn a total of 192.00 from holding Western Asset Investment or generate 12.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
CCSB Financial Corp vs. Western Asset Investment
Performance |
| Timeline |
| CCSB Financial Corp |
| Western Asset Investment |
CCSB Financial and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCSB Financial and Western Asset
The main advantage of trading using opposite CCSB Financial and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCSB Financial position performs unexpectedly, Western 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 Western Asset will offset losses from the drop in Western Asset's long position.| CCSB Financial vs. GoHealth | CCSB Financial vs. Hertz Global Holdings | CCSB Financial vs. Triton International Limited | CCSB Financial vs. Vestis |
| Western Asset vs. Pioneer Floating Rate | Western Asset vs. The Gabelli Equity | Western Asset vs. Pioneer Municipal High | Western Asset vs. Nuveen Global High |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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