Correlation Between Western Asset and Calvert High
Can any of the company-specific risk be diversified away by investing in both Western Asset and Calvert High 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 Calvert High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset High and Calvert High Yield, you can compare the effects of market volatilities on Western Asset and Calvert High 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 Calvert High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Calvert High.
Diversification Opportunities for Western Asset and Calvert High
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Western and Calvert is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Calvert High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert High Yield 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 High are associated (or correlated) with Calvert High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert High Yield has no effect on the direction of Western Asset i.e., Western Asset and Calvert High go up and down completely randomly.
Pair Corralation between Western Asset and Calvert High
Assuming the 90 days horizon Western Asset High is expected to generate 1.25 times more return on investment than Calvert High. However, Western Asset is 1.25 times more volatile than Calvert High Yield. It trades about 0.11 of its potential returns per unit of risk. Calvert High Yield is currently generating about 0.11 per unit of risk. If you would invest 586.00 in Western Asset High on January 20, 2025 and sell it today you would earn a total of 98.00 from holding Western Asset High or generate 16.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset High vs. Calvert High Yield
Performance |
| Timeline |
| Western Asset High |
| Calvert High Yield |
Western Asset and Calvert High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Calvert High
The main advantage of trading using opposite Western Asset and Calvert High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Calvert High 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 Calvert High will offset losses from the drop in Calvert High's long position.| Western Asset vs. Calvert Global Energy | Western Asset vs. Invesco Energy Fund | Western Asset vs. Thrivent Natural Resources | Western Asset vs. Ivy Natural Resources |
| Calvert High vs. Franklin Natural Resources | Calvert High vs. Adams Natural Resources | Calvert High vs. Energy Basic Materials | Calvert High vs. Jennison Natural Resources |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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