Correlation Between Western Asset and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Western Asset and Advent Claymore 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 Advent Claymore 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 Advent Claymore Convertible, you can compare the effects of market volatilities on Western Asset and Advent Claymore 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 Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Advent Claymore.
Diversification Opportunities for Western Asset and Advent Claymore
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Western and Advent is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Advent Claymore Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Claymore Conv 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 Advent Claymore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Claymore Conv has no effect on the direction of Western Asset i.e., Western Asset and Advent Claymore go up and down completely randomly.
Pair Corralation between Western Asset and Advent Claymore
Considering the 90-day investment horizon Western Asset is expected to generate 1.09 times less return on investment than Advent Claymore. But when comparing it to its historical volatility, Western Asset Diversified is 1.6 times less risky than Advent Claymore. It trades about 0.35 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,167 in Advent Claymore Convertible on October 20, 2024 and sell it today you would earn a total of 48.00 from holding Advent Claymore Convertible or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Advent Claymore Convertible
Performance |
| Timeline |
| Western Asset Diversified |
| Advent Claymore Conv |
Western Asset and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Advent Claymore
The main advantage of trading using opposite Western Asset and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Advent Claymore 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 Advent Claymore will offset losses from the drop in Advent Claymore's long position.| Western Asset vs. Neuberger Berman Next | Western Asset vs. Doubleline Yield Opportunities | Western Asset vs. PIMCO Access Income | Western Asset vs. Blackrock Innovation Growth |
| Advent Claymore vs. Nuveen Global High | Advent Claymore vs. Blackstone Gso Strategic | Advent Claymore vs. Thornburg Income Builder | Advent Claymore vs. Western Asset Diversified |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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