Correlation Between CVW CleanTech and Western Asset
Can any of the company-specific risk be diversified away by investing in both CVW CleanTech 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 CVW CleanTech and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CleanTech and Western Asset Investment, you can compare the effects of market volatilities on CVW CleanTech 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 CVW CleanTech with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and Western Asset.
Diversification Opportunities for CVW CleanTech and Western Asset
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CVW and Western is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech and Western Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Investment and CVW CleanTech 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 CVW CleanTech 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 Investment has no effect on the direction of CVW CleanTech i.e., CVW CleanTech and Western Asset go up and down completely randomly.
Pair Corralation between CVW CleanTech and Western Asset
Assuming the 90 days horizon CVW CleanTech is expected to generate 1.64 times more return on investment than Western Asset. However, CVW CleanTech is 1.64 times more volatile than Western Asset Investment. It trades about 0.29 of its potential returns per unit of risk. Western Asset Investment is currently generating about -0.02 per unit of risk. If you would invest 59.00 in CVW CleanTech on August 30, 2024 and sell it today you would earn a total of 3.00 from holding CVW CleanTech or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CleanTech vs. Western Asset Investment
Performance |
| Timeline |
| CVW CleanTech |
| Western Asset Investment |
CVW CleanTech and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CleanTech and Western Asset
The main advantage of trading using opposite CVW CleanTech and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CleanTech 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.| CVW CleanTech vs. Legacy Education | CVW CleanTech vs. Apple Inc | CVW CleanTech vs. NVIDIA | CVW CleanTech vs. Microsoft |
| Western Asset vs. ClimateRock Class A | Western Asset vs. CF Acquisition VII | Western Asset vs. DP Cap Acquisition |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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