Correlation Between Advent Claymore and New Economy
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and New Economy 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 New Economy 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 New Economy Fund, you can compare the effects of market volatilities on Advent Claymore and New Economy 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 New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and New Economy.
Diversification Opportunities for Advent Claymore and New Economy
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advent and New is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund 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 New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Advent Claymore i.e., Advent Claymore and New Economy go up and down completely randomly.
Pair Corralation between Advent Claymore and New Economy
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 0.89 times more return on investment than New Economy. However, Advent Claymore Convertible is 1.12 times less risky than New Economy. It trades about 0.14 of its potential returns per unit of risk. New Economy Fund is currently generating about 0.11 per unit of risk. If you would invest 932.00 in Advent Claymore Convertible on September 12, 2024 and sell it today you would earn a total of 304.00 from holding Advent Claymore Convertible or generate 32.62% 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. New Economy Fund
Performance |
| Timeline |
| Advent Claymore Conv |
| New Economy Fund |
Advent Claymore and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and New Economy
The main advantage of trading using opposite Advent Claymore and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, New Economy 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 New Economy will offset losses from the drop in New Economy'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 |
| New Economy vs. Advent Claymore Convertible | New Economy vs. Calamos Dynamic Convertible | New Economy vs. Fidelity Sai Convertible | New Economy vs. Rationalpier 88 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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