Correlation Between VanEck CMCI and Western Asset
Can any of the company-specific risk be diversified away by investing in both VanEck CMCI 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 VanEck CMCI and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck CMCI Commodity and Western Asset Premier, you can compare the effects of market volatilities on VanEck CMCI 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 VanEck CMCI with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck CMCI and Western Asset.
Diversification Opportunities for VanEck CMCI and Western Asset
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VanEck and Western is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding VanEck CMCI Commodity and Western Asset Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Premier and VanEck CMCI 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 VanEck CMCI Commodity 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 Premier has no effect on the direction of VanEck CMCI i.e., VanEck CMCI and Western Asset go up and down completely randomly.
Pair Corralation between VanEck CMCI and Western Asset
Given the investment horizon of 90 days VanEck CMCI is expected to generate 7.65 times less return on investment than Western Asset. But when comparing it to its historical volatility, VanEck CMCI Commodity is 1.3 times less risky than Western Asset. It trades about 0.01 of its potential returns per unit of risk. Western Asset Premier is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 936.00 in Western Asset Premier on September 1, 2024 and sell it today you would earn a total of 158.00 from holding Western Asset Premier or generate 16.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 86.56% |
| Values | Daily Returns |
VanEck CMCI Commodity vs. Western Asset Premier
Performance |
| Timeline |
| VanEck CMCI Commodity |
| Western Asset Premier |
VanEck CMCI and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck CMCI and Western Asset
The main advantage of trading using opposite VanEck CMCI and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck CMCI 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.| VanEck CMCI vs. ETRACS Bloomberg Commodity | VanEck CMCI vs. Neuberger Berman Commodity | VanEck CMCI vs. abrdn Bloomberg All | VanEck CMCI vs. abrdn Bloomberg All |
| Western Asset vs. MFS Investment Grade | Western Asset vs. Platinum Asia Investments | Western Asset vs. Pimco New York | Western Asset vs. Invesco Pennsylvania Value |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |