Correlation Between Columbia Minnesota and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Columbia Minnesota 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 Columbia Minnesota and Advent Claymore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Minnesota Tax Exempt and Advent Claymore Convertible, you can compare the effects of market volatilities on Columbia Minnesota 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 Columbia Minnesota with a short position of Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Minnesota and Advent Claymore.
Diversification Opportunities for Columbia Minnesota and Advent Claymore
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Advent is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Minnesota Tax Exempt 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 Columbia Minnesota 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 Columbia Minnesota Tax Exempt 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 Columbia Minnesota i.e., Columbia Minnesota and Advent Claymore go up and down completely randomly.
Pair Corralation between Columbia Minnesota and Advent Claymore
Assuming the 90 days horizon Columbia Minnesota Tax Exempt is expected to under-perform the Advent Claymore. But the mutual fund apears to be less risky and, when comparing its historical volatility, Columbia Minnesota Tax Exempt is 1.9 times less risky than Advent Claymore. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Advent Claymore Convertible is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,224 in Advent Claymore Convertible on November 3, 2024 and sell it today you would earn a total of 22.00 from holding Advent Claymore Convertible or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Columbia Minnesota Tax Exempt vs. Advent Claymore Convertible
Performance |
| Timeline |
| Columbia Minnesota Tax |
| Advent Claymore Conv |
Columbia Minnesota and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Minnesota and Advent Claymore
The main advantage of trading using opposite Columbia Minnesota and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Minnesota 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.| Columbia Minnesota vs. Gmo International Equity | Columbia Minnesota vs. Qs Global Equity | Columbia Minnesota vs. Dws Equity Sector | Columbia Minnesota vs. Calvert International Equity |
| Advent Claymore vs. Pace High Yield | Advent Claymore vs. Ironclad Managed Risk | Advent Claymore vs. Gugg Actv Invmt | Advent Claymore vs. Needham Aggressive Growth |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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