Correlation Between Advent Claymore and Baron Health
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Baron Health 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 Baron Health 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 Baron Health Care, you can compare the effects of market volatilities on Advent Claymore and Baron Health 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 Baron Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Baron Health.
Diversification Opportunities for Advent Claymore and Baron Health
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Advent and Baron is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Baron Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Health Care 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 Baron Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Health Care has no effect on the direction of Advent Claymore i.e., Advent Claymore and Baron Health go up and down completely randomly.
Pair Corralation between Advent Claymore and Baron Health
Assuming the 90 days horizon Advent Claymore is expected to generate 2.94 times less return on investment than Baron Health. But when comparing it to its historical volatility, Advent Claymore Convertible is 1.57 times less risky than Baron Health. It trades about 0.16 of its potential returns per unit of risk. Baron Health Care is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,935 in Baron Health Care on November 3, 2024 and sell it today you would earn a total of 104.00 from holding Baron Health Care or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Baron Health Care
Performance |
| Timeline |
| Advent Claymore Conv |
| Baron Health Care |
Advent Claymore and Baron Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Baron Health
The main advantage of trading using opposite Advent Claymore and Baron Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Baron Health 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 Baron Health will offset losses from the drop in Baron Health's long position.| Advent Claymore vs. Tiaa Cref Large Cap Value | Advent Claymore vs. Fisher Large Cap | Advent Claymore vs. Qs Large Cap | Advent Claymore vs. Guidemark Large Cap |
| Baron Health vs. Chestnut Street Exchange | Baron Health vs. Ab Government Exchange | Baron Health vs. Schwab Government Money | Baron Health vs. Financial Industries Fund |
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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