Correlation Between Advent Claymore and Federated Ultrashort
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Federated Ultrashort 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 Federated Ultrashort 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 Federated Ultrashort Bond, you can compare the effects of market volatilities on Advent Claymore and Federated Ultrashort 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 Federated Ultrashort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Federated Ultrashort.
Diversification Opportunities for Advent Claymore and Federated Ultrashort
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Advent and Federated is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Federated Ultrashort Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Ultrashort Bond 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 Federated Ultrashort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Ultrashort Bond has no effect on the direction of Advent Claymore i.e., Advent Claymore and Federated Ultrashort go up and down completely randomly.
Pair Corralation between Advent Claymore and Federated Ultrashort
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 8.48 times more return on investment than Federated Ultrashort. However, Advent Claymore is 8.48 times more volatile than Federated Ultrashort Bond. It trades about 0.12 of its potential returns per unit of risk. Federated Ultrashort Bond is currently generating about 0.2 per unit of risk. If you would invest 1,057 in Advent Claymore Convertible on September 1, 2024 and sell it today you would earn a total of 161.00 from holding Advent Claymore Convertible or generate 15.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Federated Ultrashort Bond
Performance |
| Timeline |
| Advent Claymore Conv |
| Federated Ultrashort Bond |
Advent Claymore and Federated Ultrashort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Federated Ultrashort
The main advantage of trading using opposite Advent Claymore and Federated Ultrashort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Federated Ultrashort 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 Federated Ultrashort will offset losses from the drop in Federated Ultrashort'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 |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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