Correlation Between Allspring Income and Western Asset

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

By analyzing existing cross correlation between Allspring Income Opportunities and Western Asset High, you can compare the effects of market volatilities on Allspring Income 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 Allspring Income with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allspring Income and Western Asset.

Diversification Opportunities for Allspring Income and Western Asset

0.97

Correlation Coefficient

Allspring Income  Western Asset

Almost no diversification

The 3 months correlation between Allspring and Western is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Allspring Income Opportunities and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Allspring Income 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 Allspring Income Opportunities 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 High has no effect on the direction of Allspring Income i.e., Allspring Income and Western Asset go up and down completely randomly.

Pair Corralation between Allspring Income and Western Asset

Considering the 90-day investment horizon Allspring Income Opportunities is expected to generate 1.59 times more return on investment than Western Asset. However, Allspring Income is 1.59 times more volatile than Western Asset High. It trades about 0.17 of its potential returns per unit of risk. Western Asset High is currently generating about 0.19 per unit of risk. If you would invest  663.00  in Allspring Income Opportunities on May 5, 2025 and sell it today you would earn a total of  39.00  from holding Allspring Income Opportunities or generate 5.88% return on investment over 90 days.

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

Allspring Income Opportunities  vs.  Western Asset High

Allspring Income Opp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allspring Income Opportunities are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Allspring Income is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Western Asset is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Allspring Income and Western Asset

The main advantage of trading using opposite Allspring Income and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allspring Income 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.

The idea behind Allspring Income Opportunities and Western Asset High 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.