Correlation Between Advent Claymore and Vela Large
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Vela Large 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 Vela Large 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 Vela Large Cap, you can compare the effects of market volatilities on Advent Claymore and Vela Large 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 Vela Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Vela Large.
Diversification Opportunities for Advent Claymore and Vela Large
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advent and Vela is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Vela Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vela Large Cap 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 Vela Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vela Large Cap has no effect on the direction of Advent Claymore i.e., Advent Claymore and Vela Large go up and down completely randomly.
Pair Corralation between Advent Claymore and Vela Large
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 1.06 times more return on investment than Vela Large. However, Advent Claymore is 1.06 times more volatile than Vela Large Cap. It trades about 0.74 of its potential returns per unit of risk. Vela Large Cap is currently generating about 0.32 per unit of risk. If you would invest 1,113 in Advent Claymore Convertible on September 3, 2024 and sell it today you would earn a total of 105.00 from holding Advent Claymore Convertible or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Vela Large Cap
Performance |
| Timeline |
| Advent Claymore Conv |
| Vela Large Cap |
Advent Claymore and Vela Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Vela Large
The main advantage of trading using opposite Advent Claymore and Vela Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Vela Large 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 Vela Large will offset losses from the drop in Vela Large's long position.| Advent Claymore vs. Tekla Healthcare Investors | Advent Claymore vs. Tekla Life Sciences | Advent Claymore vs. Cohen Steers Reit | Advent Claymore vs. XAI Octagon Floating |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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