Correlation Between Advent Claymore and Fidelity Municipal
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Fidelity Municipal 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 Fidelity Municipal 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 Fidelity Municipal Income, you can compare the effects of market volatilities on Advent Claymore and Fidelity Municipal 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 Fidelity Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Fidelity Municipal.
Diversification Opportunities for Advent Claymore and Fidelity Municipal
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advent and Fidelity is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Fidelity Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Municipal Income 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 Fidelity Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Municipal Income has no effect on the direction of Advent Claymore i.e., Advent Claymore and Fidelity Municipal go up and down completely randomly.
Pair Corralation between Advent Claymore and Fidelity Municipal
Assuming the 90 days horizon Advent Claymore Convertible is expected to generate 0.71 times more return on investment than Fidelity Municipal. However, Advent Claymore Convertible is 1.42 times less risky than Fidelity Municipal. It trades about -0.06 of its potential returns per unit of risk. Fidelity Municipal Income is currently generating about -0.05 per unit of risk. If you would invest 1,264 in Advent Claymore Convertible on October 26, 2024 and sell it today you would lose (18.00) from holding Advent Claymore Convertible or give up 1.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.5% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Fidelity Municipal Income
Performance |
| Timeline |
| Advent Claymore Conv |
| Fidelity Municipal Income |
Advent Claymore and Fidelity Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Fidelity Municipal
The main advantage of trading using opposite Advent Claymore and Fidelity Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Fidelity Municipal 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 Fidelity Municipal will offset losses from the drop in Fidelity Municipal's long position.| Advent Claymore vs. Elfun Government Money | Advent Claymore vs. Us Government Securities | Advent Claymore vs. Lord Abbett Government | Advent Claymore vs. Payden Government 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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