Correlation Between Visa and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Advent Claymore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Advent Claymore Convertible, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Advent Claymore.
Diversification Opportunities for Visa and Advent Claymore
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Visa and Advent is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and Advent Claymore go up and down completely randomly.
Pair Corralation between Visa and Advent Claymore
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.55 times more return on investment than Advent Claymore. However, Visa is 1.55 times more volatile than Advent Claymore Convertible. It trades about 0.1 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about -0.05 per unit of risk. If you would invest 31,319 in Visa Class A on October 25, 2024 and sell it today you would earn a total of 1,037 from holding Visa Class A or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.44% |
| Values | Daily Returns |
Visa Class A vs. Advent Claymore Convertible
Performance |
| Timeline |
| Visa Class A |
| Advent Claymore Conv |
Visa and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Advent Claymore
The main advantage of trading using opposite Visa and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| Advent Claymore vs. Hewitt Money Market | Advent Claymore vs. Schwab Government Money | Advent Claymore vs. Hsbc Treasury Money | Advent Claymore vs. Dws Government Money |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |