Correlation Between MainStay CBRE and Western AssetClaymore

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

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

Diversification Opportunities for MainStay CBRE and Western AssetClaymore

0.46

Correlation Coefficient

MainStay CBRE  Western AssetClaymore

Very weak diversification

The 3 months correlation between MainStay and Western is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding MainStay CBRE Global and Western AssetClaymore Infl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western AssetClaymore and MainStay CBRE 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 MainStay CBRE Global 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 MainStay CBRE i.e., MainStay CBRE and Western AssetClaymore go up and down completely randomly.

Pair Corralation between MainStay CBRE and Western AssetClaymore

Given the investment horizon of 90 days MainStay CBRE Global is expected to generate 2.35 times more return on investment than Western AssetClaymore. However, MainStay CBRE is 2.35 times more volatile than Western AssetClaymore Infl. It trades about 0.04 of its potential returns per unit of risk. Western AssetClaymore Infl is currently generating about 0.09 per unit of risk. If you would invest  1,133  in MainStay CBRE Global on December 4, 2024 and sell it today you would earn a total of  122.00  from holding MainStay CBRE Global or generate 10.77% return on investment over 90 days.

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

MainStay CBRE Global  vs.  Western AssetClaymore Infl

MainStay CBRE Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days MainStay CBRE Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, MainStay CBRE is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Western AssetClaymore

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Western AssetClaymore Infl are ranked lower than 6 (%) 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 MainStay CBRE and Western AssetClaymore

The main advantage of trading using opposite MainStay CBRE and Western AssetClaymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MainStay CBRE 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 MainStay CBRE Global 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.