Correlation Between Advent Claymore and Rational Strategic
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Rational Strategic 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 Strategic 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 Strategic Allocation, you can compare the effects of market volatilities on Advent Claymore and Rational Strategic 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 Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Rational Strategic.
Diversification Opportunities for Advent Claymore and Rational Strategic
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advent and Rational is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Rational Strategic Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rational Strategic 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 Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rational Strategic has no effect on the direction of Advent Claymore i.e., Advent Claymore and Rational Strategic go up and down completely randomly.
Pair Corralation between Advent Claymore and Rational Strategic
Considering the 90-day investment horizon Advent Claymore is expected to generate 1.08 times less return on investment than Rational Strategic. But when comparing it to its historical volatility, Advent Claymore Convertible is 1.16 times less risky than Rational Strategic. It trades about 0.08 of its potential returns per unit of risk. Rational Strategic Allocation is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 638.00 in Rational Strategic Allocation on September 20, 2024 and sell it today you would earn a total of 316.00 from holding Rational Strategic Allocation or generate 49.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Rational Strategic Allocation
Performance |
| Timeline |
| Advent Claymore Conv |
| Rational Strategic |
Advent Claymore and Rational Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Rational Strategic
The main advantage of trading using opposite Advent Claymore and Rational Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Rational Strategic 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 Strategic will offset losses from the drop in Rational Strategic'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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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