Correlation Between Telecommunications and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Telecommunications 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 Telecommunications and Advent Claymore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecommunications Portfolio Fidelity and Advent Claymore Convertible, you can compare the effects of market volatilities on Telecommunications 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 Telecommunications with a short position of Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecommunications and Advent Claymore.
Diversification Opportunities for Telecommunications and Advent Claymore
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Telecommunications and Advent is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Telecommunications Portfolio F 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 Telecommunications 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 Telecommunications Portfolio Fidelity 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 Telecommunications i.e., Telecommunications and Advent Claymore go up and down completely randomly.
Pair Corralation between Telecommunications and Advent Claymore
Assuming the 90 days horizon Telecommunications Portfolio Fidelity is expected to generate 1.14 times more return on investment than Advent Claymore. However, Telecommunications is 1.14 times more volatile than Advent Claymore Convertible. It trades about 0.18 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about 0.12 per unit of risk. If you would invest 4,522 in Telecommunications Portfolio Fidelity on September 1, 2024 and sell it today you would earn a total of 1,173 from holding Telecommunications Portfolio Fidelity or generate 25.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Telecommunications Portfolio F vs. Advent Claymore Convertible
Performance |
| Timeline |
| Telecommunications |
| Advent Claymore Conv |
Telecommunications and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecommunications and Advent Claymore
The main advantage of trading using opposite Telecommunications and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecommunications 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.| Telecommunications vs. Advent Claymore Convertible | Telecommunications vs. Absolute Convertible Arbitrage | Telecommunications vs. Lord Abbett Convertible | Telecommunications vs. Calamos Dynamic Convertible |
| Advent Claymore vs. Nuveen Global High | Advent Claymore vs. Blackstone Gso Strategic | Advent Claymore vs. Thornburg Income Builder | Advent Claymore vs. Western Asset Diversified |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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