Correlation Between Adams Natural and Clough Global
Can any of the company-specific risk be diversified away by investing in both Adams Natural and Clough Global 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 Adams Natural and Clough Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Natural Resources and Clough Global Ef, you can compare the effects of market volatilities on Adams Natural and Clough Global 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 Adams Natural with a short position of Clough Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and Clough Global.
Diversification Opportunities for Adams Natural and Clough Global
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adams and Clough is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources and Clough Global Ef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clough Global Ef and Adams Natural 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 Adams Natural Resources are associated (or correlated) with Clough Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clough Global Ef has no effect on the direction of Adams Natural i.e., Adams Natural and Clough Global go up and down completely randomly.
Pair Corralation between Adams Natural and Clough Global
Considering the 90-day investment horizon Adams Natural is expected to generate 1.22 times less return on investment than Clough Global. In addition to that, Adams Natural is 1.11 times more volatile than Clough Global Ef. It trades about 0.1 of its total potential returns per unit of risk. Clough Global Ef is currently generating about 0.13 per unit of volatility. If you would invest 522.00 in Clough Global Ef on August 29, 2024 and sell it today you would earn a total of 166.00 from holding Clough Global Ef or generate 31.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adams Natural Resources vs. Clough Global Ef
Performance |
| Timeline |
| Adams Natural Resources |
| Clough Global Ef |
Adams Natural and Clough Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Natural and Clough Global
The main advantage of trading using opposite Adams Natural and Clough Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural position performs unexpectedly, Clough Global 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 Clough Global will offset losses from the drop in Clough Global's long position.| Adams Natural vs. Liberty All Star | Adams Natural vs. Tri Continental Closed | Adams Natural vs. Royce Value Closed | Adams Natural vs. Central Securities |
| Clough Global vs. Gabelli Global Small | Clough Global vs. MFS Investment Grade | Clough Global vs. Eaton Vance National | Clough Global vs. GAMCO Natural Resources |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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