Correlation Between Ethereum and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Ethereum 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 Ethereum and Advent Claymore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ethereum and Advent Claymore Convertible, you can compare the effects of market volatilities on Ethereum 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 Ethereum with a short position of Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ethereum and Advent Claymore.
Diversification Opportunities for Ethereum and Advent Claymore
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ethereum and Advent is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ethereum 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 Ethereum 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 Ethereum 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 Ethereum i.e., Ethereum and Advent Claymore go up and down completely randomly.
Pair Corralation between Ethereum and Advent Claymore
Assuming the 90 days trading horizon Ethereum is expected to generate 7.05 times more return on investment than Advent Claymore. However, Ethereum is 7.05 times more volatile than Advent Claymore Convertible. It trades about 0.01 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about -0.05 per unit of risk. If you would invest 332,346 in Ethereum on October 25, 2024 and sell it today you would lose (7,020) from holding Ethereum or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Ethereum vs. Advent Claymore Convertible
Performance |
| Timeline |
| Ethereum |
| Advent Claymore Conv |
Ethereum and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ethereum and Advent Claymore
The main advantage of trading using opposite Ethereum and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ethereum 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 Ethereum 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |