Correlation Between Bitcoin and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Bitcoin and Advent Claymore 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 Bitcoin and Advent Claymore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bitcoin and Advent Claymore Convertible, you can compare the effects of market volatilities on Bitcoin and Advent Claymore 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 Bitcoin with a short position of Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and Advent Claymore.
Diversification Opportunities for Bitcoin and Advent Claymore
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bitcoin and Advent is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Advent Claymore Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Claymore Conv and Bitcoin 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 Bitcoin are associated (or correlated) with Advent Claymore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Claymore Conv has no effect on the direction of Bitcoin i.e., Bitcoin and Advent Claymore go up and down completely randomly.
Pair Corralation between Bitcoin and Advent Claymore
Assuming the 90 days trading horizon Bitcoin is expected to generate 4.58 times more return on investment than Advent Claymore. However, Bitcoin is 4.58 times more volatile than Advent Claymore Convertible. It trades about 0.12 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about 0.02 per unit of risk. If you would invest 6,618,004 in Bitcoin on October 25, 2024 and sell it today you would earn a total of 3,741,896 from holding Bitcoin or generate 56.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.06% |
| Values | Daily Returns |
Bitcoin vs. Advent Claymore Convertible
Performance |
| Timeline |
| Bitcoin |
| Advent Claymore Conv |
Bitcoin and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bitcoin and Advent Claymore
The main advantage of trading using opposite Bitcoin and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin position performs unexpectedly, Advent Claymore 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 Advent Claymore will offset losses from the drop in Advent Claymore's long position.The idea behind Bitcoin and Advent Claymore Convertible pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Advent Claymore vs. Hewitt Money Market | Advent Claymore vs. Schwab Government Money | Advent Claymore vs. Hsbc Treasury Money | Advent Claymore vs. Dws Government Money |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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