Correlation Between Sp Smallcap and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Sp Smallcap 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 Sp Smallcap and Advent Claymore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Smallcap 600 and Advent Claymore Convertible, you can compare the effects of market volatilities on Sp Smallcap 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 Sp Smallcap with a short position of Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Smallcap and Advent Claymore.
Diversification Opportunities for Sp Smallcap and Advent Claymore
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RYSVX and Advent is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sp Smallcap 600 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 Sp Smallcap 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 Sp Smallcap 600 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 Sp Smallcap i.e., Sp Smallcap and Advent Claymore go up and down completely randomly.
Pair Corralation between Sp Smallcap and Advent Claymore
Assuming the 90 days horizon Sp Smallcap 600 is expected to generate 2.1 times more return on investment than Advent Claymore. However, Sp Smallcap is 2.1 times more volatile than Advent Claymore Convertible. It trades about 0.02 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about -0.02 per unit of risk. If you would invest 18,244 in Sp Smallcap 600 on October 13, 2024 and sell it today you would earn a total of 2,286 from holding Sp Smallcap 600 or generate 12.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sp Smallcap 600 vs. Advent Claymore Convertible
Performance |
| Timeline |
| Sp Smallcap 600 |
| Advent Claymore Conv |
Sp Smallcap and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp Smallcap and Advent Claymore
The main advantage of trading using opposite Sp Smallcap and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Smallcap 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.| Sp Smallcap vs. Dws Government Money | Sp Smallcap vs. American High Income Municipal | Sp Smallcap vs. Transamerica Intermediate Muni | Sp Smallcap vs. Lord Abbett Intermediate |
| Advent Claymore vs. Touchstone Small Cap | Advent Claymore vs. Sp Smallcap 600 | Advent Claymore vs. Lebenthal Lisanti Small | Advent Claymore vs. Ab Small Cap |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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