Correlation Between Advent Claymore and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Mid 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 Mid 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 Mid Cap Strategic, you can compare the effects of market volatilities on Advent Claymore and Mid 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 Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Mid Cap.
Diversification Opportunities for Advent Claymore and Mid Cap
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Advent and Mid is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Mid Cap Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Strategic 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 Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Strategic has no effect on the direction of Advent Claymore i.e., Advent Claymore and Mid Cap go up and down completely randomly.
Pair Corralation between Advent Claymore and Mid Cap
Considering the 90-day investment horizon Advent Claymore is expected to generate 1.03 times less return on investment than Mid Cap. But when comparing it to its historical volatility, Advent Claymore Convertible is 1.06 times less risky than Mid Cap. It trades about 0.13 of its potential returns per unit of risk. Mid Cap Strategic is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,847 in Mid Cap Strategic on September 12, 2024 and sell it today you would earn a total of 297.00 from holding Mid Cap Strategic or generate 16.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Mid Cap Strategic
Performance |
| Timeline |
| Advent Claymore Conv |
| Mid Cap Strategic |
Advent Claymore and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Mid Cap
The main advantage of trading using opposite Advent Claymore and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Mid 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 Mid Cap will offset losses from the drop in Mid 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 |
| Mid Cap vs. Calamos Dynamic Convertible | Mid Cap vs. Advent Claymore Convertible | Mid Cap vs. Rationalpier 88 Convertible | Mid Cap vs. Virtus 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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