Correlation Between Advent Claymore and Catalystsmh High
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Catalystsmh High 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 Catalystsmh High 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 Catalystsmh High Income, you can compare the effects of market volatilities on Advent Claymore and Catalystsmh High 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 Catalystsmh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Catalystsmh High.
Diversification Opportunities for Advent Claymore and Catalystsmh High
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Advent and Catalystsmh is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Catalystsmh High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh High 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 Catalystsmh High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh High Income has no effect on the direction of Advent Claymore i.e., Advent Claymore and Catalystsmh High go up and down completely randomly.
Pair Corralation between Advent Claymore and Catalystsmh High
Assuming the 90 days horizon Advent Claymore Convertible is expected to generate 1.75 times more return on investment than Catalystsmh High. However, Advent Claymore is 1.75 times more volatile than Catalystsmh High Income. It trades about 0.18 of its potential returns per unit of risk. Catalystsmh High Income is currently generating about 0.18 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 Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Catalystsmh High Income
Performance |
| Timeline |
| Advent Claymore Conv |
| Catalystsmh High Income |
Advent Claymore and Catalystsmh High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Catalystsmh High
The main advantage of trading using opposite Advent Claymore and Catalystsmh High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Catalystsmh High 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 Catalystsmh High will offset losses from the drop in Catalystsmh High's long position.| Advent Claymore vs. Pace High Yield | Advent Claymore vs. Ironclad Managed Risk | Advent Claymore vs. Gugg Actv Invmt | Advent Claymore vs. Needham Aggressive Growth |
| Catalystsmh High vs. Morningstar Global Income | Catalystsmh High vs. Pnc Balanced Allocation | Catalystsmh High vs. Fm Investments Large | Catalystsmh High vs. Rbb 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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