Correlation Between Advent Claymore and Ultrasmall Cap
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Ultrasmall 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 Ultrasmall 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 Ultrasmall Cap Profund Ultrasmall Cap, you can compare the effects of market volatilities on Advent Claymore and Ultrasmall 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 Ultrasmall Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Ultrasmall Cap.
Diversification Opportunities for Advent Claymore and Ultrasmall Cap
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advent and Ultrasmall is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Ultrasmall Cap Profund Ultrasm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrasmall Cap Profund 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 Ultrasmall Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrasmall Cap Profund has no effect on the direction of Advent Claymore i.e., Advent Claymore and Ultrasmall Cap go up and down completely randomly.
Pair Corralation between Advent Claymore and Ultrasmall Cap
Considering the 90-day investment horizon Advent Claymore is expected to generate 1.4 times less return on investment than Ultrasmall Cap. But when comparing it to its historical volatility, Advent Claymore Convertible is 2.47 times less risky than Ultrasmall Cap. It trades about 0.08 of its potential returns per unit of risk. Ultrasmall Cap Profund Ultrasmall Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,010 in Ultrasmall Cap Profund Ultrasmall Cap on September 13, 2024 and sell it today you would earn a total of 2,813 from holding Ultrasmall Cap Profund Ultrasmall Cap or generate 56.15% 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. Ultrasmall Cap Profund Ultrasm
Performance |
| Timeline |
| Advent Claymore Conv |
| Ultrasmall Cap Profund |
Advent Claymore and Ultrasmall Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Ultrasmall Cap
The main advantage of trading using opposite Advent Claymore and Ultrasmall Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Ultrasmall 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 Ultrasmall Cap will offset losses from the drop in Ultrasmall 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 |
| Ultrasmall Cap vs. T Rowe Price | Ultrasmall Cap vs. L Abbett Growth | Ultrasmall Cap vs. Franklin Growth Opportunities | Ultrasmall Cap vs. Smallcap Growth Fund |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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