Correlation Between Advent Claymore and Franklin Natural
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Franklin 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 Franklin 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 Franklin Natural Resources, you can compare the effects of market volatilities on Advent Claymore and Franklin 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 Franklin Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Franklin Natural.
Diversification Opportunities for Advent Claymore and Franklin Natural
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Advent and Franklin is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Franklin Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Natural Res 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 Franklin Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Natural Res has no effect on the direction of Advent Claymore i.e., Advent Claymore and Franklin Natural go up and down completely randomly.
Pair Corralation between Advent Claymore and Franklin Natural
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 0.92 times more return on investment than Franklin Natural. However, Advent Claymore Convertible is 1.09 times less risky than Franklin Natural. It trades about 0.13 of its potential returns per unit of risk. Franklin Natural Resources is currently generating about 0.02 per unit of risk. If you would invest 1,057 in Advent Claymore Convertible on August 30, 2024 and sell it today you would earn a total of 163.00 from holding Advent Claymore Convertible or generate 15.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Franklin Natural Resources
Performance |
| Timeline |
| Advent Claymore Conv |
| Franklin Natural Res |
Advent Claymore and Franklin Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Franklin Natural
The main advantage of trading using opposite Advent Claymore and Franklin Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Franklin 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 Franklin Natural will offset losses from the drop in Franklin Natural's long position.| Advent Claymore vs. Calamos LongShort Equity | Advent Claymore vs. Calamos Convertible And | Advent Claymore vs. Calamos Global Total | Advent Claymore vs. DTF Tax Free |
| Franklin Natural vs. Advent Claymore Convertible | Franklin Natural vs. Fidelity Sai Convertible | Franklin Natural vs. Lord Abbett Convertible | Franklin Natural vs. Gabelli Convertible And |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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