Correlation Between Western Asset and Simplify Exchange
Can any of the company-specific risk be diversified away by investing in both Western Asset and Simplify Exchange 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 Simplify Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Claymore and Simplify Exchange Traded, you can compare the effects of market volatilities on Western Asset and Simplify Exchange 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 Simplify Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Simplify Exchange.
Diversification Opportunities for Western Asset and Simplify Exchange
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Simplify is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Claymore and Simplify Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Exchange Traded 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 Claymore are associated (or correlated) with Simplify Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Exchange Traded has no effect on the direction of Western Asset i.e., Western Asset and Simplify Exchange go up and down completely randomly.
Pair Corralation between Western Asset and Simplify Exchange
Considering the 90-day investment horizon Western Asset Claymore is expected to generate 2.69 times more return on investment than Simplify Exchange. However, Western Asset is 2.69 times more volatile than Simplify Exchange Traded. It trades about 0.18 of its potential returns per unit of risk. Simplify Exchange Traded is currently generating about 0.45 per unit of risk. If you would invest 856.00 in Western Asset Claymore on November 27, 2024 and sell it today you would earn a total of 15.00 from holding Western Asset Claymore or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Claymore vs. Simplify Exchange Traded
Performance |
| Timeline |
| Western Asset Claymore |
| Simplify Exchange Traded |
Western Asset and Simplify Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Simplify Exchange
The main advantage of trading using opposite Western Asset and Simplify Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Simplify Exchange 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 Simplify Exchange will offset losses from the drop in Simplify Exchange's long position.| Western Asset vs. The Gabelli Equity | Western Asset vs. Eaton Vance National | Western Asset vs. Structured Products Corp | Western Asset vs. Aberdeen Standard Global |
| Simplify Exchange vs. Columbia Diversified Fixed | Simplify Exchange vs. MFS Active Core | Simplify Exchange vs. Doubleline Etf Trust | Simplify Exchange vs. Virtus Newfleet ABSMBS |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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