Correlation Between Western Asset and CVW CleanTech
Can any of the company-specific risk be diversified away by investing in both Western Asset and CVW CleanTech 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 CVW CleanTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Investment and CVW CleanTech, you can compare the effects of market volatilities on Western Asset and CVW CleanTech 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 CVW CleanTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and CVW CleanTech.
Diversification Opportunities for Western Asset and CVW CleanTech
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and CVW is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Investment and CVW CleanTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVW CleanTech 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 Investment are associated (or correlated) with CVW CleanTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVW CleanTech has no effect on the direction of Western Asset i.e., Western Asset and CVW CleanTech go up and down completely randomly.
Pair Corralation between Western Asset and CVW CleanTech
Considering the 90-day investment horizon Western Asset is expected to generate 8.02 times less return on investment than CVW CleanTech. But when comparing it to its historical volatility, Western Asset Investment is 11.56 times less risky than CVW CleanTech. It trades about 0.04 of its potential returns per unit of risk. CVW CleanTech is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 68.00 in CVW CleanTech on September 2, 2024 and sell it today you would lose (7.00) from holding CVW CleanTech or give up 10.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Investment vs. CVW CleanTech
Performance |
| Timeline |
| Western Asset Investment |
| CVW CleanTech |
Western Asset and CVW CleanTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and CVW CleanTech
The main advantage of trading using opposite Western Asset and CVW CleanTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, CVW CleanTech 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 CVW CleanTech will offset losses from the drop in CVW CleanTech's long position.| Western Asset vs. Visa Class A | Western Asset vs. Diamond Hill Investment | Western Asset vs. Distoken Acquisition | Western Asset vs. Associated Capital Group |
| CVW CleanTech vs. Highway Holdings Limited | CVW CleanTech vs. Esperion Therapeutics | CVW CleanTech vs. Merit Medical Systems | CVW CleanTech vs. Cementos Pacasmayo SAA |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |