Correlation Between Advent Claymore and Alger Growth
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Alger Growth 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 Alger Growth 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 Alger Growth Income, you can compare the effects of market volatilities on Advent Claymore and Alger Growth 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 Alger Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Alger Growth.
Diversification Opportunities for Advent Claymore and Alger Growth
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Advent and Alger is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Alger Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Growth Income 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 Alger Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Growth Income has no effect on the direction of Advent Claymore i.e., Advent Claymore and Alger Growth go up and down completely randomly.
Pair Corralation between Advent Claymore and Alger Growth
Considering the 90-day investment horizon Advent Claymore is expected to generate 1.12 times less return on investment than Alger Growth. In addition to that, Advent Claymore is 1.32 times more volatile than Alger Growth Income. It trades about 0.08 of its total potential returns per unit of risk. Alger Growth Income is currently generating about 0.11 per unit of volatility. If you would invest 5,436 in Alger Growth Income on November 28, 2024 and sell it today you would earn a total of 2,416 from holding Alger Growth Income or generate 44.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Alger Growth Income
Performance |
| Timeline |
| Advent Claymore Conv |
| Alger Growth Income |
Advent Claymore and Alger Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Alger Growth
The main advantage of trading using opposite Advent Claymore and Alger Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Alger Growth 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 Alger Growth will offset losses from the drop in Alger Growth's long position.| Advent Claymore vs. Nuveen Global High | Advent Claymore vs. Blackstone Gso Strategic | Advent Claymore vs. Thornburg Income Builder | Advent Claymore vs. Western Asset Diversified |
| Alger Growth vs. Pimco Emerging Markets | Alger Growth vs. Mondrian Emerging Markets | Alger Growth vs. Ashmore Emerging Markets | Alger Growth vs. Pace International Emerging |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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