Correlation Between Advent Claymore and Health Care
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Health Care 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 Health Care 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 Health Care Fund, you can compare the effects of market volatilities on Advent Claymore and Health Care 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 Health Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Health Care.
Diversification Opportunities for Advent Claymore and Health Care
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advent and Health is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Health Care Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Care Fund 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 Health Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Care Fund has no effect on the direction of Advent Claymore i.e., Advent Claymore and Health Care go up and down completely randomly.
Pair Corralation between Advent Claymore and Health Care
Assuming the 90 days horizon Advent Claymore Convertible is expected to generate 0.86 times more return on investment than Health Care. However, Advent Claymore Convertible is 1.16 times less risky than Health Care. It trades about 0.08 of its potential returns per unit of risk. Health Care Fund is currently generating about 0.02 per unit of risk. If you would invest 1,168 in Advent Claymore Convertible on November 3, 2024 and sell it today you would earn a total of 78.00 from holding Advent Claymore Convertible or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Health Care Fund
Performance |
| Timeline |
| Advent Claymore Conv |
| Health Care Fund |
Advent Claymore and Health Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Health Care
The main advantage of trading using opposite Advent Claymore and Health Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Health Care 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 Health Care will offset losses from the drop in Health Care'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 |
| Health Care vs. Gmo Emerging Ntry | Health Care vs. Goldman Sachs Short | Health Care vs. Barings High Yield | Health Care vs. Siit High Yield |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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