Correlation Between Advent Claymore and Highland Longshort
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Highland Longshort 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 Highland Longshort 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 Highland Longshort Healthcare, you can compare the effects of market volatilities on Advent Claymore and Highland Longshort 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 Highland Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Highland Longshort.
Diversification Opportunities for Advent Claymore and Highland Longshort
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advent and Highland is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Longshort 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 Highland Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Longshort has no effect on the direction of Advent Claymore i.e., Advent Claymore and Highland Longshort go up and down completely randomly.
Pair Corralation between Advent Claymore and Highland Longshort
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 5.17 times more return on investment than Highland Longshort. However, Advent Claymore is 5.17 times more volatile than Highland Longshort Healthcare. It trades about 0.08 of its potential returns per unit of risk. Highland Longshort Healthcare is currently generating about 0.12 per unit of risk. If you would invest 804.00 in Advent Claymore Convertible on September 19, 2024 and sell it today you would earn a total of 364.00 from holding Advent Claymore Convertible or generate 45.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Highland Longshort Healthcare
Performance |
| Timeline |
| Advent Claymore Conv |
| Highland Longshort |
Advent Claymore and Highland Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Highland Longshort
The main advantage of trading using opposite Advent Claymore and Highland Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Highland Longshort 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 Highland Longshort will offset losses from the drop in Highland Longshort'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 |
| Highland Longshort vs. Virtus Convertible | Highland Longshort vs. Rationalpier 88 Convertible | Highland Longshort vs. Putnam Convertible Incm Gwth | Highland Longshort vs. Advent Claymore Convertible |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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