Correlation Between Western Asset and Tiaa-cref Green

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

By analyzing existing cross correlation between Western Asset High and Tiaa Cref Green Bond, you can compare the effects of market volatilities on Western Asset and Tiaa-cref Green 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 Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Tiaa-cref Green.

Diversification Opportunities for Western Asset and Tiaa-cref Green

0.87

Correlation Coefficient

Western Asset  Tiaa-cref Green

Very poor diversification

The 3 months correlation between Western and Tiaa-cref is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Tiaa Cref Green Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Green 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 High are associated (or correlated) with Tiaa-cref Green. 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 Green has no effect on the direction of Western Asset i.e., Western Asset and Tiaa-cref Green go up and down completely randomly.

Pair Corralation between Western Asset and Tiaa-cref Green

Assuming the 90 days horizon Western Asset High is expected to generate 0.97 times more return on investment than Tiaa-cref Green. However, Western Asset High is 1.03 times less risky than Tiaa-cref Green. It trades about 0.12 of its potential returns per unit of risk. Tiaa Cref Green Bond is currently generating about 0.1 per unit of risk. If you would invest  687.00  in Western Asset High on December 28, 2024 and sell it today you would earn a total of  11.00  from holding Western Asset High or generate 1.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Western Asset High  vs.  Tiaa Cref Green Bond

Western Asset High

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset High are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Western Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tiaa Cref Green

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Green Bond are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Tiaa-cref Green is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Western Asset and Tiaa-cref Green

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

The idea behind Western Asset High and Tiaa Cref Green Bond 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.