Correlation Between Western Asset and Investcorp Credit

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

By analyzing existing cross correlation between Western Asset Diversified and Investcorp Credit Management, you can compare the effects of market volatilities on Western Asset and Investcorp Credit 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 Investcorp Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Investcorp Credit.

Diversification Opportunities for Western Asset and Investcorp Credit

0.45

Correlation Coefficient

Western Asset  Investcorp Credit

Very weak diversification

The 3 months correlation between Western and Investcorp is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Investcorp Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Credit 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 Diversified are associated (or correlated) with Investcorp Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp Credit has no effect on the direction of Western Asset i.e., Western Asset and Investcorp Credit go up and down completely randomly.

Pair Corralation between Western Asset and Investcorp Credit

Considering the 90-day investment horizon Western Asset Diversified is expected to generate 0.4 times more return on investment than Investcorp Credit. However, Western Asset Diversified is 2.49 times less risky than Investcorp Credit. It trades about 0.09 of its potential returns per unit of risk. Investcorp Credit Management is currently generating about 0.0 per unit of risk. If you would invest  1,091  in Western Asset Diversified on May 6, 2025 and sell it today you would earn a total of  408.00  from holding Western Asset Diversified or generate 37.4% return on investment over 90 days.

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

Western Asset Diversified  vs.  Investcorp Credit Management

Western Asset Diversified

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset Diversified are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Western Asset may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Investcorp Credit

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Investcorp Credit Management are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Investcorp Credit is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Western Asset and Investcorp Credit

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

The idea behind Western Asset Diversified and Investcorp Credit Management 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.