Correlation Between Aqr Alternative and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Aqr Alternative 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 Aqr Alternative and Advent Claymore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Alternative Risk and Advent Claymore Convertible, you can compare the effects of market volatilities on Aqr Alternative 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 Aqr Alternative with a short position of Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Alternative and Advent Claymore.
Diversification Opportunities for Aqr Alternative and Advent Claymore
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aqr and Advent is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Alternative Risk 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 Aqr Alternative 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 Aqr Alternative Risk 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 Aqr Alternative i.e., Aqr Alternative and Advent Claymore go up and down completely randomly.
Pair Corralation between Aqr Alternative and Advent Claymore
Assuming the 90 days horizon Aqr Alternative is expected to generate 4.79 times less return on investment than Advent Claymore. But when comparing it to its historical volatility, Aqr Alternative Risk is 1.03 times less risky than Advent Claymore. It trades about 0.13 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about 0.6 of returns per unit of risk over similar time horizon. If you would invest 1,111 in Advent Claymore Convertible on August 28, 2024 and sell it today you would earn a total of 89.00 from holding Advent Claymore Convertible or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Alternative Risk vs. Advent Claymore Convertible
Performance |
| Timeline |
| Aqr Alternative Risk |
| Advent Claymore Conv |
Aqr Alternative and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Alternative and Advent Claymore
The main advantage of trading using opposite Aqr Alternative and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Alternative 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.| Aqr Alternative vs. Aqr Large Cap | Aqr Alternative vs. Aqr Large Cap | Aqr Alternative vs. Aqr International Defensive | Aqr Alternative vs. Aqr International Defensive |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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