Correlation Between Advent Claymore and Invesco Developing
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Invesco Developing 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 Invesco Developing 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 Invesco Developing Markets, you can compare the effects of market volatilities on Advent Claymore and Invesco Developing 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 Invesco Developing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Invesco Developing.
Diversification Opportunities for Advent Claymore and Invesco Developing
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advent and Invesco is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Invesco Developing Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Developing 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 Invesco Developing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Developing has no effect on the direction of Advent Claymore i.e., Advent Claymore and Invesco Developing go up and down completely randomly.
Pair Corralation between Advent Claymore and Invesco Developing
Assuming the 90 days horizon Advent Claymore Convertible is expected to generate 0.69 times more return on investment than Invesco Developing. However, Advent Claymore Convertible is 1.44 times less risky than Invesco Developing. It trades about 0.16 of its potential returns per unit of risk. Invesco Developing Markets is currently generating about 0.05 per unit of risk. If you would invest 1,224 in Advent Claymore Convertible on November 3, 2024 and sell it today you would earn a total of 22.00 from holding Advent Claymore Convertible or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Invesco Developing Markets
Performance |
| Timeline |
| Advent Claymore Conv |
| Invesco Developing |
Advent Claymore and Invesco Developing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Invesco Developing
The main advantage of trading using opposite Advent Claymore and Invesco Developing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Invesco Developing 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 Invesco Developing will offset losses from the drop in Invesco Developing'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 |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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