Correlation Between Advent Claymore and Vy(r) Franklin
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Vy(r) Franklin 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 Vy(r) Franklin 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 Vy Franklin Income, you can compare the effects of market volatilities on Advent Claymore and Vy(r) Franklin 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 Vy(r) Franklin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Vy(r) Franklin.
Diversification Opportunities for Advent Claymore and Vy(r) Franklin
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advent and Vy(r) is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Vy Franklin Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Franklin 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 Vy(r) Franklin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Franklin Income has no effect on the direction of Advent Claymore i.e., Advent Claymore and Vy(r) Franklin go up and down completely randomly.
Pair Corralation between Advent Claymore and Vy(r) Franklin
Assuming the 90 days horizon Advent Claymore is expected to generate 2.49 times less return on investment than Vy(r) Franklin. In addition to that, Advent Claymore is 1.22 times more volatile than Vy Franklin Income. It trades about 0.05 of its total potential returns per unit of risk. Vy Franklin Income is currently generating about 0.16 per unit of volatility. If you would invest 1,017 in Vy Franklin Income on November 7, 2024 and sell it today you would earn a total of 14.00 from holding Vy Franklin Income or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Vy Franklin Income
Performance |
| Timeline |
| Advent Claymore Conv |
| Vy Franklin Income |
Advent Claymore and Vy(r) Franklin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Vy(r) Franklin
The main advantage of trading using opposite Advent Claymore and Vy(r) Franklin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Vy(r) Franklin 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 Vy(r) Franklin will offset losses from the drop in Vy(r) Franklin's long position.| Advent Claymore vs. Dreyfusstandish Global Fixed | Advent Claymore vs. Gmo Global Equity | Advent Claymore vs. Kinetics Global Fund | Advent Claymore vs. Us Global Investors |
| Vy(r) Franklin vs. Voya Government Money | Vy(r) Franklin vs. Franklin Adjustable Government | Vy(r) Franklin vs. Fidelity Series Government | Vy(r) Franklin vs. Great West Government Mortgage |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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