Correlation Between Largecap Value and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Largecap Value 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 Largecap Value and Advent Claymore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Largecap Value Fund and Advent Claymore Convertible, you can compare the effects of market volatilities on Largecap Value 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 Largecap Value with a short position of Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Largecap Value and Advent Claymore.
Diversification Opportunities for Largecap Value and Advent Claymore
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Largecap and Advent is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Largecap Value Fund 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 Largecap Value 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 Largecap Value Fund 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 Largecap Value i.e., Largecap Value and Advent Claymore go up and down completely randomly.
Pair Corralation between Largecap Value and Advent Claymore
Assuming the 90 days horizon Largecap Value Fund is expected to under-perform the Advent Claymore. In addition to that, Largecap Value is 1.84 times more volatile than Advent Claymore Convertible. It trades about -0.06 of its total potential returns per unit of risk. Advent Claymore Convertible is currently generating about 0.06 per unit of volatility. If you would invest 1,210 in Advent Claymore Convertible on October 24, 2024 and sell it today you would earn a total of 27.00 from holding Advent Claymore Convertible or generate 2.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Largecap Value Fund vs. Advent Claymore Convertible
Performance |
| Timeline |
| Largecap Value |
| Advent Claymore Conv |
Largecap Value and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Largecap Value and Advent Claymore
The main advantage of trading using opposite Largecap Value and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Largecap Value 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.| Largecap Value vs. Invesco Gold Special | Largecap Value vs. First Eagle Gold | Largecap Value vs. James Balanced Golden | Largecap Value vs. The Gold Bullion |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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