Correlation Between Transamerica Floating and Transamerica Asset

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

By analyzing existing cross correlation between Transamerica Floating Rate and Transamerica Asset Allocation, you can compare the effects of market volatilities on Transamerica Floating and Transamerica 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 Floating with a short position of Transamerica Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Floating and Transamerica Asset.

Diversification Opportunities for Transamerica Floating and Transamerica Asset

0.0

Correlation Coefficient

Transamerica Floating  Transamerica Asset

Pay attention - limited upside

The 3 months correlation between Transamerica and Transamerica is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Floating Rate and Transamerica Asset Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Asset and Transamerica Floating 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 Floating Rate are associated (or correlated) with Transamerica Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Asset has no effect on the direction of Transamerica Floating i.e., Transamerica Floating and Transamerica Asset go up and down completely randomly.

Pair Corralation between Transamerica Floating and Transamerica Asset

If you would invest  1,192  in Transamerica Asset Allocation on May 7, 2025 and sell it today you would earn a total of  80.00  from holding Transamerica Asset Allocation or generate 6.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Transamerica Floating Rate  vs.  Transamerica Asset Allocation

Transamerica Floating

Risk-Adjusted Performance

Solid

Over the last 90 days Transamerica Floating Rate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Transamerica Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Transamerica Asset

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Transamerica Asset Allocation are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Transamerica Asset may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Transamerica Floating and Transamerica Asset

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

The idea behind Transamerica Floating Rate and Transamerica Asset Allocation 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.