Correlation Between Transamerica Large and Western Asset
Can any of the company-specific risk be diversified away by investing in both Transamerica Large 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 Large 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 Large Cap and Western Asset Municipal, you can compare the effects of market volatilities on Transamerica Large 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 Large with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Large and Western Asset.
Diversification Opportunities for Transamerica Large and Western Asset
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Transamerica and Western is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Large Cap and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal and Transamerica Large 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 Large Cap 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 Municipal has no effect on the direction of Transamerica Large i.e., Transamerica Large and Western Asset go up and down completely randomly.
Pair Corralation between Transamerica Large and Western Asset
Assuming the 90 days horizon Transamerica Large Cap is expected to generate 3.76 times more return on investment than Western Asset. However, Transamerica Large is 3.76 times more volatile than Western Asset Municipal. It trades about 0.14 of its potential returns per unit of risk. Western Asset Municipal is currently generating about 0.08 per unit of risk. If you would invest 1,643 in Transamerica Large Cap on September 6, 2025 and sell it today you would earn a total of 94.00 from holding Transamerica Large Cap or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Large Cap vs. Western Asset Municipal
Performance |
| Timeline |
| Transamerica Large Cap |
| Western Asset Municipal |
Transamerica Large and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Large and Western Asset
The main advantage of trading using opposite Transamerica Large and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Large 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 Large vs. Aamhimco Short Duration | Transamerica Large vs. Virtus Multi Sector Short | Transamerica Large vs. Easterly Snow Longshort | Transamerica Large vs. Diamond Hill Long Short |
| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |