Correlation Between IShares Bloomberg and Western AssetClaymore

Can any of the company-specific risk be diversified away by investing in both IShares Bloomberg and Western AssetClaymore 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 IShares Bloomberg and Western AssetClaymore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Bloomberg Roll and Western AssetClaymore Infl, you can compare the effects of market volatilities on IShares Bloomberg and Western AssetClaymore 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 IShares Bloomberg with a short position of Western AssetClaymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Bloomberg and Western AssetClaymore.

Diversification Opportunities for IShares Bloomberg and Western AssetClaymore

0.61

Correlation Coefficient

IShares Bloomberg  Western AssetClaymore

Poor diversification

The 3 months correlation between IShares and Western is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding iShares Bloomberg Roll and Western AssetClaymore Infl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western AssetClaymore and IShares Bloomberg 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 iShares Bloomberg Roll are associated (or correlated) with Western AssetClaymore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western AssetClaymore has no effect on the direction of IShares Bloomberg i.e., IShares Bloomberg and Western AssetClaymore go up and down completely randomly.

Pair Corralation between IShares Bloomberg and Western AssetClaymore

Given the investment horizon of 90 days iShares Bloomberg Roll is expected to under-perform the Western AssetClaymore. In addition to that, IShares Bloomberg is 1.31 times more volatile than Western AssetClaymore Infl. It trades about -0.01 of its total potential returns per unit of risk. Western AssetClaymore Infl is currently generating about 0.05 per unit of volatility. If you would invest  727.00  in Western AssetClaymore Infl on September 14, 2024 and sell it today you would earn a total of  99.00  from holding Western AssetClaymore Infl or generate 13.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

iShares Bloomberg Roll  vs.  Western AssetClaymore Infl

iShares Bloomberg Roll

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Bloomberg Roll are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, IShares Bloomberg is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Western AssetClaymore

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Western AssetClaymore Infl are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Western AssetClaymore is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Bloomberg and Western AssetClaymore

The main advantage of trading using opposite IShares Bloomberg and Western AssetClaymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Bloomberg position performs unexpectedly, Western AssetClaymore 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 AssetClaymore will offset losses from the drop in Western AssetClaymore's long position.

The idea behind iShares Bloomberg Roll and Western AssetClaymore Infl pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.