Correlation Between Advent Claymore and Nuveen New
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Nuveen New 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 Nuveen New 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 Nuveen New Jersey, you can compare the effects of market volatilities on Advent Claymore and Nuveen New 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 Nuveen New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Nuveen New.
Diversification Opportunities for Advent Claymore and Nuveen New
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advent and Nuveen is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Nuveen New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New Jersey 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 Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New Jersey has no effect on the direction of Advent Claymore i.e., Advent Claymore and Nuveen New go up and down completely randomly.
Pair Corralation between Advent Claymore and Nuveen New
Assuming the 90 days horizon Advent Claymore Convertible is expected to generate 1.71 times more return on investment than Nuveen New. However, Advent Claymore is 1.71 times more volatile than Nuveen New Jersey. It trades about -0.01 of its potential returns per unit of risk. Nuveen New Jersey is currently generating about -0.01 per unit of risk. If you would invest 1,292 in Advent Claymore Convertible on November 7, 2024 and sell it today you would lose (42.00) from holding Advent Claymore Convertible or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Nuveen New Jersey
Performance |
| Timeline |
| Advent Claymore Conv |
| Nuveen New Jersey |
Advent Claymore and Nuveen New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Nuveen New
The main advantage of trading using opposite Advent Claymore and Nuveen New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Nuveen New 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 Nuveen New will offset losses from the drop in Nuveen New'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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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