Correlation Between Advent Claymore and Royce Special
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Royce 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 Royce 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 Royce Special Equity, you can compare the effects of market volatilities on Advent Claymore and Royce 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 Royce Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Royce Special.
Diversification Opportunities for Advent Claymore and Royce Special
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advent and Royce is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Royce Special Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royce Special Equity 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 Royce Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royce Special Equity has no effect on the direction of Advent Claymore i.e., Advent Claymore and Royce Special go up and down completely randomly.
Pair Corralation between Advent Claymore and Royce Special
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 0.5 times more return on investment than Royce Special. However, Advent Claymore Convertible is 1.99 times less risky than Royce Special. It trades about 0.36 of its potential returns per unit of risk. Royce Special Equity is currently generating about 0.15 per unit of risk. If you would invest 1,144 in Advent Claymore Convertible on September 13, 2024 and sell it today you would earn a total of 106.00 from holding Advent Claymore Convertible or generate 9.27% 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. Royce Special Equity
Performance |
| Timeline |
| Advent Claymore Conv |
| Royce Special Equity |
Advent Claymore and Royce Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Royce Special
The main advantage of trading using opposite Advent Claymore and Royce Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Royce 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 Royce Special will offset losses from the drop in Royce 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 |
| Royce Special vs. Absolute Convertible Arbitrage | Royce Special vs. Lord Abbett Convertible | Royce Special vs. Gabelli Convertible And | Royce Special vs. Allianzgi Convertible 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 Stocks Directory module to find actively traded stocks across global markets.
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