Correlation Between Advent Claymore and 1919 Financial
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and 1919 Financial 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 1919 Financial 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 1919 Financial Services, you can compare the effects of market volatilities on Advent Claymore and 1919 Financial 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 1919 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and 1919 Financial.
Diversification Opportunities for Advent Claymore and 1919 Financial
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advent and 1919 is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and 1919 Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1919 Financial Services 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 1919 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1919 Financial Services has no effect on the direction of Advent Claymore i.e., Advent Claymore and 1919 Financial go up and down completely randomly.
Pair Corralation between Advent Claymore and 1919 Financial
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 0.44 times more return on investment than 1919 Financial. However, Advent Claymore Convertible is 2.28 times less risky than 1919 Financial. It trades about 0.22 of its potential returns per unit of risk. 1919 Financial Services is currently generating about -0.07 per unit of risk. If you would invest 1,101 in Advent Claymore Convertible on September 26, 2024 and sell it today you would earn a total of 94.00 from holding Advent Claymore Convertible or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. 1919 Financial Services
Performance |
| Timeline |
| Advent Claymore Conv |
| 1919 Financial Services |
Advent Claymore and 1919 Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and 1919 Financial
The main advantage of trading using opposite Advent Claymore and 1919 Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, 1919 Financial 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 1919 Financial will offset losses from the drop in 1919 Financial's long position.| Advent Claymore vs. Calamos Global Dynamic | Advent Claymore vs. Calamos Strategic Total | Advent Claymore vs. Calamos LongShort Equity | Advent Claymore vs. Eaton Vance Tax |
| 1919 Financial vs. Lord Abbett Convertible | 1919 Financial vs. Virtus Convertible | 1919 Financial vs. Advent Claymore Convertible | 1919 Financial vs. Gabelli Convertible And |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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