Correlation Between Advent Claymore and Western Asset
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Western Asset 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 Advent Claymore and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advent Claymore Convertible and Western Asset E, you can compare the effects of market volatilities on Advent Claymore and Western Asset 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 Advent Claymore with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Western Asset.
Diversification Opportunities for Advent Claymore and Western Asset
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Advent and Western is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E and Advent Claymore 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 Advent Claymore Convertible are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset E has no effect on the direction of Advent Claymore i.e., Advent Claymore and Western Asset go up and down completely randomly.
Pair Corralation between Advent Claymore and Western Asset
Assuming the 90 days horizon Advent Claymore Convertible is expected to under-perform the Western Asset. In addition to that, Advent Claymore is 1.55 times more volatile than Western Asset E. It trades about 0.0 of its total potential returns per unit of risk. Western Asset E is currently generating about 0.03 per unit of volatility. If you would invest 1,001 in Western Asset E on December 12, 2024 and sell it today you would earn a total of 53.00 from holding Western Asset E or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Western Asset E
Performance |
| Timeline |
| Advent Claymore Conv |
| Western Asset E |
Advent Claymore and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Western Asset
The main advantage of trading using opposite Advent Claymore and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Advent Claymore vs. The Hartford Emerging | ||
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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