Correlation Between Advent Claymore and Equity Growth
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Equity Growth 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 Advent Claymore and Equity Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advent Claymore Convertible and Equity Growth Fund, you can compare the effects of market volatilities on Advent Claymore and Equity Growth 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 Advent Claymore with a short position of Equity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Equity Growth.
Diversification Opportunities for Advent Claymore and Equity Growth
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Advent and Equity is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Equity Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth and Advent Claymore 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 Advent Claymore Convertible are associated (or correlated) with Equity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth has no effect on the direction of Advent Claymore i.e., Advent Claymore and Equity Growth go up and down completely randomly.
Pair Corralation between Advent Claymore and Equity Growth
Assuming the 90 days horizon Advent Claymore Convertible is expected to generate 0.6 times more return on investment than Equity Growth. However, Advent Claymore Convertible is 1.65 times less risky than Equity Growth. It trades about 0.18 of its potential returns per unit of risk. Equity Growth Fund is currently generating about 0.07 per unit of risk. If you would invest 1,226 in Advent Claymore Convertible on October 24, 2024 and sell it today you would earn a total of 22.00 from holding Advent Claymore Convertible or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Equity Growth Fund
Performance |
| Timeline |
| Advent Claymore Conv |
| Equity Growth |
Advent Claymore and Equity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Equity Growth
The main advantage of trading using opposite Advent Claymore and Equity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Equity Growth 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 Equity Growth will offset losses from the drop in Equity Growth's long position.| Advent Claymore vs. Hewitt Money Market | Advent Claymore vs. Schwab Government Money | Advent Claymore vs. Hsbc Treasury Money | Advent Claymore vs. Dws Government Money |
| Equity Growth vs. Qs Global Equity | Equity Growth vs. Locorr Dynamic Equity | Equity Growth vs. Goldman Sachs Equity | Equity Growth vs. Gmo Global Equity |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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