Correlation Between Western Asset and Tiaa-cref Inflation
Can any of the company-specific risk be diversified away by investing in both Western Asset and Tiaa-cref Inflation 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 Tiaa-cref Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Inflation and Tiaa Cref Inflation Link, you can compare the effects of market volatilities on Western Asset and Tiaa-cref Inflation 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 Tiaa-cref Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Tiaa-cref Inflation.
Diversification Opportunities for Western Asset and Tiaa-cref Inflation
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WESTERN and Tiaa-cref is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Tiaa Cref Inflation Link in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Inflation 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 Inflation are associated (or correlated) with Tiaa-cref Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Inflation has no effect on the direction of Western Asset i.e., Western Asset and Tiaa-cref Inflation go up and down completely randomly.
Pair Corralation between Western Asset and Tiaa-cref Inflation
Assuming the 90 days horizon Western Asset Inflation is expected to under-perform the Tiaa-cref Inflation. In addition to that, Western Asset is 1.54 times more volatile than Tiaa Cref Inflation Link. It trades about -0.07 of its total potential returns per unit of risk. Tiaa Cref Inflation Link is currently generating about 0.08 per unit of volatility. If you would invest 1,057 in Tiaa Cref Inflation Link on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Tiaa Cref Inflation Link or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Inflation vs. Tiaa Cref Inflation Link
Performance |
| Timeline |
| Western Asset Inflation |
| Tiaa Cref Inflation |
Western Asset and Tiaa-cref Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Tiaa-cref Inflation
The main advantage of trading using opposite Western Asset and Tiaa-cref Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Tiaa-cref Inflation 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 Tiaa-cref Inflation will offset losses from the drop in Tiaa-cref Inflation's long position.| Western Asset vs. Invesco Technology Fund | Western Asset vs. Mfs Technology Fund | Western Asset vs. Hennessy Technology Fund | Western Asset vs. Columbia Global Technology |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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