Correlation Between Advent Claymore and Destinations Core
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Destinations Core 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 Destinations Core 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 Destinations Core Fixed, you can compare the effects of market volatilities on Advent Claymore and Destinations Core 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 Destinations Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Destinations Core.
Diversification Opportunities for Advent Claymore and Destinations Core
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advent and Destinations is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Destinations Core Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destinations Core Fixed 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 Destinations Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destinations Core Fixed has no effect on the direction of Advent Claymore i.e., Advent Claymore and Destinations Core go up and down completely randomly.
Pair Corralation between Advent Claymore and Destinations Core
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 2.51 times more return on investment than Destinations Core. However, Advent Claymore is 2.51 times more volatile than Destinations Core Fixed. It trades about 0.07 of its potential returns per unit of risk. Destinations Core Fixed is currently generating about 0.03 per unit of risk. If you would invest 835.00 in Advent Claymore Convertible on September 26, 2024 and sell it today you would earn a total of 360.00 from holding Advent Claymore Convertible or generate 43.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
Advent Claymore Convertible vs. Destinations Core Fixed
Performance |
Timeline |
Advent Claymore Conv |
Destinations Core Fixed |
Advent Claymore and Destinations Core Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Advent Claymore and Destinations Core
The main advantage of trading using opposite Advent Claymore and Destinations Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Destinations Core 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 Destinations Core will offset losses from the drop in Destinations Core's long position.Advent Claymore vs. Calamos Global Dynamic | Advent Claymore vs. Calamos Strategic Total | Advent Claymore vs. Calamos LongShort Equity | Advent Claymore vs. Eaton Vance Tax |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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