Correlation Between Western AssetClaymore and United States
Can any of the company-specific risk be diversified away by investing in both Western AssetClaymore and United States 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 AssetClaymore and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western AssetClaymore Infl and United States Copper, you can compare the effects of market volatilities on Western AssetClaymore and United States 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 AssetClaymore with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western AssetClaymore and United States.
Diversification Opportunities for Western AssetClaymore and United States
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and United is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Western AssetClaymore Infl and United States Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Copper and Western AssetClaymore 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 AssetClaymore Infl are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Copper has no effect on the direction of Western AssetClaymore i.e., Western AssetClaymore and United States go up and down completely randomly.
Pair Corralation between Western AssetClaymore and United States
Considering the 90-day investment horizon Western AssetClaymore Infl is expected to generate 0.22 times more return on investment than United States. However, Western AssetClaymore Infl is 4.5 times less risky than United States. It trades about 0.02 of its potential returns per unit of risk. United States Copper is currently generating about -0.16 per unit of risk. If you would invest 821.00 in Western AssetClaymore Infl on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Western AssetClaymore Infl or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western AssetClaymore Infl vs. United States Copper
Performance |
| Timeline |
| Western AssetClaymore |
| United States Copper |
Western AssetClaymore and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western AssetClaymore and United States
The main advantage of trading using opposite Western AssetClaymore and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western AssetClaymore position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Western AssetClaymore vs. MainStay CBRE Global | Western AssetClaymore vs. Cohen Steers Closed | Western AssetClaymore vs. Pgim Global High | Western AssetClaymore vs. The Gabelli Multimedia |
| United States vs. Aquagold International | United States vs. Morningstar Unconstrained Allocation | United States vs. High Yield Municipal Fund | United States vs. Thrivent High Yield |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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