Correlation Between Advent Claymore and Dreyfus Natural
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Dreyfus Natural 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 Dreyfus Natural 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 Dreyfus Natural Resources, you can compare the effects of market volatilities on Advent Claymore and Dreyfus Natural 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 Dreyfus Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Dreyfus Natural.
Diversification Opportunities for Advent Claymore and Dreyfus Natural
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advent and Dreyfus is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Dreyfus Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Natural Resources 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 Dreyfus Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Natural Resources has no effect on the direction of Advent Claymore i.e., Advent Claymore and Dreyfus Natural go up and down completely randomly.
Pair Corralation between Advent Claymore and Dreyfus Natural
Considering the 90-day investment horizon Advent Claymore is expected to generate 2.39 times less return on investment than Dreyfus Natural. In addition to that, Advent Claymore is 1.69 times more volatile than Dreyfus Natural Resources. It trades about 0.21 of its total potential returns per unit of risk. Dreyfus Natural Resources is currently generating about 0.84 per unit of volatility. If you would invest 3,641 in Dreyfus Natural Resources on October 21, 2024 and sell it today you would earn a total of 317.00 from holding Dreyfus Natural Resources or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Dreyfus Natural Resources
Performance |
| Timeline |
| Advent Claymore Conv |
| Dreyfus Natural Resources |
Advent Claymore and Dreyfus Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Dreyfus Natural
The main advantage of trading using opposite Advent Claymore and Dreyfus Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Dreyfus Natural 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 Dreyfus Natural will offset losses from the drop in Dreyfus Natural'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 |
| Dreyfus Natural vs. Transamerica High Yield | Dreyfus Natural vs. Lord Abbett Short | Dreyfus Natural vs. Prudential High Yield | Dreyfus Natural vs. Msift High Yield |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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