Correlation Between Advent Claymore and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Floating Rate 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 Floating Rate 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 Floating Rate Fund, you can compare the effects of market volatilities on Advent Claymore and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Floating Rate.
Diversification Opportunities for Advent Claymore and Floating Rate
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advent and Floating is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Advent Claymore i.e., Advent Claymore and Floating Rate go up and down completely randomly.
Pair Corralation between Advent Claymore and Floating Rate
Assuming the 90 days horizon Advent Claymore Convertible is expected to generate 3.97 times more return on investment than Floating Rate. However, Advent Claymore is 3.97 times more volatile than Floating Rate Fund. It trades about 0.07 of its potential returns per unit of risk. Floating Rate Fund is currently generating about 0.26 per unit of risk. If you would invest 1,188 in Advent Claymore Convertible on November 7, 2024 and sell it today you would earn a total of 62.00 from holding Advent Claymore Convertible or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Floating Rate Fund
Performance |
| Timeline |
| Advent Claymore Conv |
| Floating Rate |
Advent Claymore and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Floating Rate
The main advantage of trading using opposite Advent Claymore and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| Advent Claymore vs. Goldman Sachs Short | Advent Claymore vs. Angel Oak Ultrashort | Advent Claymore vs. Virtus Multi Sector Short | Advent Claymore vs. American Funds Tax Exempt |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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