Correlation Between Advent Claymore and Rational Special
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Rational Special 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 Rational Special 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 Rational Special Situations, you can compare the effects of market volatilities on Advent Claymore and Rational Special 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 Rational Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Rational Special.
Diversification Opportunities for Advent Claymore and Rational Special
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Advent and Rational is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Rational Special Situations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rational Special Sit 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 Rational Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rational Special Sit has no effect on the direction of Advent Claymore i.e., Advent Claymore and Rational Special go up and down completely randomly.
Pair Corralation between Advent Claymore and Rational Special
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 10.28 times more return on investment than Rational Special. However, Advent Claymore is 10.28 times more volatile than Rational Special Situations. It trades about 0.2 of its potential returns per unit of risk. Rational Special Situations is currently generating about 0.32 per unit of risk. If you would invest 1,117 in Advent Claymore Convertible on September 12, 2024 and sell it today you would earn a total of 119.00 from holding Advent Claymore Convertible or generate 10.65% 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. Rational Special Situations
Performance |
| Timeline |
| Advent Claymore Conv |
| Rational Special Sit |
Advent Claymore and Rational Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Rational Special
The main advantage of trading using opposite Advent Claymore and Rational Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Rational Special 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 Rational Special will offset losses from the drop in Rational Special'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 |
| Rational Special vs. Intermediate Government Bond | Rational Special vs. Dunham Porategovernment Bond | Rational Special vs. Dreyfus Government Cash | Rational Special vs. Prudential Government Income |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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