Correlation Between Western Asset and Allspring Income

Can any of the company-specific risk be diversified away by investing in both Western Asset and Allspring Income 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 Allspring Income 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 Allspring Income Opportunities, you can compare the effects of market volatilities on Western Asset and Allspring Income 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 Allspring Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Allspring Income.

Diversification Opportunities for Western Asset and Allspring Income

0.97

Correlation Coefficient

Western Asset  Allspring Income

Almost no diversification

The 3 months correlation between Western and Allspring is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Allspring Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allspring Income Opp 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 Allspring Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allspring Income Opp has no effect on the direction of Western Asset i.e., Western Asset and Allspring Income go up and down completely randomly.

Pair Corralation between Western Asset and Allspring Income

Considering the 90-day investment horizon Western Asset is expected to generate 1.42 times less return on investment than Allspring Income. But when comparing it to its historical volatility, Western Asset High is 1.58 times less risky than Allspring Income. It trades about 0.21 of its potential returns per unit of risk. Allspring Income Opportunities is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  659.00  in Allspring Income Opportunities on May 6, 2025 and sell it today you would earn a total of  43.00  from holding Allspring Income Opportunities or generate 6.53% 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 High  vs.  Allspring Income Opportunities

Western Asset High

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset High are ranked lower than 16 (%) 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 recent stock price confusion, may contribute to short-horizon losses for the traders.

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 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather unsteady basic indicators, Allspring Income may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Western Asset and Allspring Income

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

The idea behind Western Asset High and Allspring Income Opportunities 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.