Correlation Between Advent Claymore and Locorr Dynamic
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Locorr Dynamic 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 Locorr Dynamic 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 Locorr Dynamic Equity, you can compare the effects of market volatilities on Advent Claymore and Locorr Dynamic 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 Locorr Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Locorr Dynamic.
Diversification Opportunities for Advent Claymore and Locorr Dynamic
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advent and Locorr is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Locorr Dynamic Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Dynamic Equity 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 Locorr Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Dynamic Equity has no effect on the direction of Advent Claymore i.e., Advent Claymore and Locorr Dynamic go up and down completely randomly.
Pair Corralation between Advent Claymore and Locorr Dynamic
Assuming the 90 days horizon Advent Claymore Convertible is expected to generate 1.12 times more return on investment than Locorr Dynamic. However, Advent Claymore is 1.12 times more volatile than Locorr Dynamic Equity. It trades about 0.11 of its potential returns per unit of risk. Locorr Dynamic Equity is currently generating about -0.01 per unit of risk. If you would invest 1,233 in Advent Claymore Convertible on October 26, 2024 and sell it today you would earn a total of 13.00 from holding Advent Claymore Convertible or generate 1.05% 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. Locorr Dynamic Equity
Performance |
| Timeline |
| Advent Claymore Conv |
| Locorr Dynamic Equity |
Advent Claymore and Locorr Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Locorr Dynamic
The main advantage of trading using opposite Advent Claymore and Locorr Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Locorr Dynamic 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 Locorr Dynamic will offset losses from the drop in Locorr Dynamic'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 |
| Locorr Dynamic vs. Astoncrosswind Small Cap | Locorr Dynamic vs. Small Pany Growth | Locorr Dynamic vs. Ab Small Cap | Locorr Dynamic vs. Ab Small Cap |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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