Correlation Between Western Asset and CureVac NV

Can any of the company-specific risk be diversified away by investing in both Western Asset and CureVac NV 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 CureVac NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Western Asset Investment and CureVac NV, you can compare the effects of market volatilities on Western Asset and CureVac NV 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 CureVac NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and CureVac NV.

Diversification Opportunities for Western Asset and CureVac NV

0.42

Correlation Coefficient

Western Asset  CureVac NV

Very weak diversification

The 3 months correlation between Western and CureVac is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Investment and CureVac NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CureVac NV 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 Investment are associated (or correlated) with CureVac NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CureVac NV has no effect on the direction of Western Asset i.e., Western Asset and CureVac NV go up and down completely randomly.

Pair Corralation between Western Asset and CureVac NV

Considering the 90-day investment horizon Western Asset Investment is expected to under-perform the CureVac NV. But the stock apears to be less risky and, when comparing its historical volatility, Western Asset Investment is 10.46 times less risky than CureVac NV. The stock trades about -0.23 of its potential returns per unit of risk. The CureVac NV is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  274.00  in CureVac NV on September 27, 2024 and sell it today you would earn a total of  27.00  from holding CureVac NV or generate 9.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Western Asset Investment  vs.  CureVac NV

Western Asset Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Asset Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

CureVac NV

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CureVac NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, CureVac NV is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Western Asset and CureVac NV

The main advantage of trading using opposite Western Asset and CureVac NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, CureVac NV 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 CureVac NV will offset losses from the drop in CureVac NV's long position.

The idea behind Western Asset Investment and CureVac NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.