Correlation Between Western Asset and Swiss Re
Can any of the company-specific risk be diversified away by investing in both Western Asset and Swiss Re 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 Swiss Re into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Global and Swiss Re, you can compare the effects of market volatilities on Western Asset and Swiss Re 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 Swiss Re. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Swiss Re.
Diversification Opportunities for Western Asset and Swiss Re
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Swiss is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Global and Swiss Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Re 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 Global are associated (or correlated) with Swiss Re. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Re has no effect on the direction of Western Asset i.e., Western Asset and Swiss Re go up and down completely randomly.
Pair Corralation between Western Asset and Swiss Re
Considering the 90-day investment horizon Western Asset Global is expected to under-perform the Swiss Re. But the etf apears to be less risky and, when comparing its historical volatility, Western Asset Global is 1.68 times less risky than Swiss Re. The etf trades about -0.12 of its potential returns per unit of risk. The Swiss Re is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 3,480 in Swiss Re on September 12, 2024 and sell it today you would earn a total of 240.00 from holding Swiss Re or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Global vs. Swiss Re
Performance |
| Timeline |
| Western Asset Global |
| Swiss Re |
Western Asset and Swiss Re Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Swiss Re
The main advantage of trading using opposite Western Asset and Swiss Re positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Swiss Re 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 Swiss Re will offset losses from the drop in Swiss Re's long position.| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
| Swiss Re vs. Freedom Bank of | Swiss Re vs. HUMANA INC | Swiss Re vs. Barloworld Ltd ADR | Swiss Re vs. Morningstar Unconstrained Allocation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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