Correlation Between Advent Claymore and Growth Allocation
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Growth Allocation 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 Growth Allocation 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 Growth Allocation Index, you can compare the effects of market volatilities on Advent Claymore and Growth Allocation 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 Growth Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Growth Allocation.
Diversification Opportunities for Advent Claymore and Growth Allocation
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advent and Growth is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Growth Allocation Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Allocation Index 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 Growth Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Allocation Index has no effect on the direction of Advent Claymore i.e., Advent Claymore and Growth Allocation go up and down completely randomly.
Pair Corralation between Advent Claymore and Growth Allocation
Assuming the 90 days horizon Advent Claymore Convertible is expected to under-perform the Growth Allocation. In addition to that, Advent Claymore is 1.23 times more volatile than Growth Allocation Index. It trades about -0.02 of its total potential returns per unit of risk. Growth Allocation Index is currently generating about 0.07 per unit of volatility. If you would invest 878.00 in Growth Allocation Index on October 14, 2024 and sell it today you would earn a total of 199.00 from holding Growth Allocation Index or generate 22.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Growth Allocation Index
Performance |
| Timeline |
| Advent Claymore Conv |
| Growth Allocation Index |
Advent Claymore and Growth Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Growth Allocation
The main advantage of trading using opposite Advent Claymore and Growth Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Growth Allocation 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 Growth Allocation will offset losses from the drop in Growth Allocation's long position.| Advent Claymore vs. Touchstone Small Cap | Advent Claymore vs. Sp Smallcap 600 | Advent Claymore vs. Lebenthal Lisanti Small | Advent Claymore vs. Ab Small Cap |
| Growth Allocation vs. Putnam Vertible Securities | Growth Allocation vs. Mainstay Vertible Fund | Growth Allocation vs. Advent Claymore Convertible | Growth Allocation vs. Absolute Convertible Arbitrage |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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