Correlation Between Advent Claymore and Large Cap
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Large Cap 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 Large Cap 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 Large Cap Value, you can compare the effects of market volatilities on Advent Claymore and Large Cap 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 Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Large Cap.
Diversification Opportunities for Advent Claymore and Large Cap
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Advent and Large is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value 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 Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of Advent Claymore i.e., Advent Claymore and Large Cap go up and down completely randomly.
Pair Corralation between Advent Claymore and Large Cap
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 0.8 times more return on investment than Large Cap. However, Advent Claymore Convertible is 1.25 times less risky than Large Cap. It trades about 0.08 of its potential returns per unit of risk. Large Cap Value is currently generating about 0.01 per unit of risk. If you would invest 828.00 in Advent Claymore Convertible on September 12, 2024 and sell it today you would earn a total of 408.00 from holding Advent Claymore Convertible or generate 49.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Large Cap Value
Performance |
| Timeline |
| Advent Claymore Conv |
| Large Cap Value |
Advent Claymore and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Large Cap
The main advantage of trading using opposite Advent Claymore and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap'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 |
| Large Cap vs. Fidelity Sai Convertible | Large Cap vs. Advent Claymore Convertible | Large Cap vs. Absolute Convertible Arbitrage | Large Cap vs. Calamos Dynamic 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |