Correlation Between Transamerica Global and Western Asset
Can any of the company-specific risk be diversified away by investing in both Transamerica Global 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 Transamerica Global and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Global Equity and Western Asset Global, you can compare the effects of market volatilities on Transamerica Global 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 Transamerica Global with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Global and Western Asset.
Diversification Opportunities for Transamerica Global and Western Asset
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Transamerica and Western is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Global Equity and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Transamerica Global 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 Transamerica Global Equity 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 Global has no effect on the direction of Transamerica Global i.e., Transamerica Global and Western Asset go up and down completely randomly.
Pair Corralation between Transamerica Global and Western Asset
If you would invest (100.00) in Western Asset Global on August 28, 2024 and sell it today you would earn a total of 100.00 from holding Western Asset Global or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Global Equity vs. Western Asset Global
Performance |
| Timeline |
| Transamerica Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Western Asset Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Transamerica Global and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Global and Western Asset
The main advantage of trading using opposite Transamerica Global and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Global 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.| Transamerica Global vs. Short Oil Gas | Transamerica Global vs. Oil Gas Ultrasector | Transamerica Global vs. Firsthand Alternative Energy | Transamerica Global vs. Fidelity Advisor Energy |
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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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