Correlation Between Advent Claymore and Utilities Ultrasector
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Utilities Ultrasector 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 Utilities Ultrasector 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 Utilities Ultrasector Profund, you can compare the effects of market volatilities on Advent Claymore and Utilities Ultrasector 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 Utilities Ultrasector. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Utilities Ultrasector.
Diversification Opportunities for Advent Claymore and Utilities Ultrasector
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Advent and Utilities is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Utilities Ultrasector Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utilities Ultrasector 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 Utilities Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utilities Ultrasector has no effect on the direction of Advent Claymore i.e., Advent Claymore and Utilities Ultrasector go up and down completely randomly.
Pair Corralation between Advent Claymore and Utilities Ultrasector
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 0.37 times more return on investment than Utilities Ultrasector. However, Advent Claymore Convertible is 2.68 times less risky than Utilities Ultrasector. It trades about 0.81 of its potential returns per unit of risk. Utilities Ultrasector Profund is currently generating about 0.15 per unit of risk. If you would invest 1,102 in Advent Claymore Convertible on September 1, 2024 and sell it today you would earn a total of 116.00 from holding Advent Claymore Convertible or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Utilities Ultrasector Profund
Performance |
| Timeline |
| Advent Claymore Conv |
| Utilities Ultrasector |
Advent Claymore and Utilities Ultrasector Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Utilities Ultrasector
The main advantage of trading using opposite Advent Claymore and Utilities Ultrasector positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Utilities Ultrasector 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 Utilities Ultrasector will offset losses from the drop in Utilities Ultrasector'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 |
| Utilities Ultrasector vs. Balanced Fund Investor | Utilities Ultrasector vs. Qs Large Cap | Utilities Ultrasector vs. Fa 529 Aggressive | Utilities Ultrasector vs. Bbh Partner 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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