Correlation Between Great West and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Great West 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 Great West and Advent Claymore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Bond Index and Advent Claymore Convertible, you can compare the effects of market volatilities on Great West 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 Great West with a short position of Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Advent Claymore.
Diversification Opportunities for Great West and Advent Claymore
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Great and Advent is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Great West Bond Index 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 Great West 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 Great West Bond Index 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 Great West i.e., Great West and Advent Claymore go up and down completely randomly.
Pair Corralation between Great West and Advent Claymore
Assuming the 90 days horizon Great West is expected to generate 6.46 times less return on investment than Advent Claymore. But when comparing it to its historical volatility, Great West Bond Index is 2.55 times less risky than Advent Claymore. It trades about 0.03 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 828.00 in Advent Claymore Convertible on September 12, 2024 and sell it today you would earn a total of 408.00 from holding Advent Claymore Convertible or generate 49.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Great West Bond Index vs. Advent Claymore Convertible
Performance |
| Timeline |
| Great West Bond |
| Advent Claymore Conv |
Great West and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Advent Claymore
The main advantage of trading using opposite Great West and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West 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.| Great West vs. Putnam Convertible Incm Gwth | Great West vs. Absolute Convertible Arbitrage | Great West vs. Calamos Dynamic Convertible | Great West vs. Fidelity Sai 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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