Correlation Between Advent Claymore and State Street
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and State Street 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 State Street 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 State Street Target, you can compare the effects of market volatilities on Advent Claymore and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and State Street.
Diversification Opportunities for Advent Claymore and State Street
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advent and State is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and State Street Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Target 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Target has no effect on the direction of Advent Claymore i.e., Advent Claymore and State Street go up and down completely randomly.
Pair Corralation between Advent Claymore and State Street
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 1.48 times more return on investment than State Street. However, Advent Claymore is 1.48 times more volatile than State Street Target. It trades about 0.08 of its potential returns per unit of risk. State Street Target is currently generating about 0.1 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. State Street Target
Performance |
| Timeline |
| Advent Claymore Conv |
| State Street Target |
Advent Claymore and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and State Street
The main advantage of trading using opposite Advent Claymore and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street'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 |
| State Street vs. Allianzgi Convertible Income | State Street vs. Putnam Convertible Incm Gwth | State Street vs. Absolute Convertible Arbitrage | State Street vs. Advent Claymore 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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