Correlation Between Advent Claymore and Federated Hermes

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Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Federated Hermes 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 Federated Hermes 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 Federated Hermes Inflation, you can compare the effects of market volatilities on Advent Claymore and Federated Hermes 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 Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Federated Hermes.

Diversification Opportunities for Advent Claymore and Federated Hermes

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Advent and Federated is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Federated Hermes Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes Inf 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 Federated Hermes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Hermes Inf has no effect on the direction of Advent Claymore i.e., Advent Claymore and Federated Hermes go up and down completely randomly.

Pair Corralation between Advent Claymore and Federated Hermes

Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 4.1 times more return on investment than Federated Hermes. However, Advent Claymore is 4.1 times more volatile than Federated Hermes Inflation. It trades about 0.0 of its potential returns per unit of risk. Federated Hermes Inflation is currently generating about -0.13 per unit of risk. If you would invest  1,181  in Advent Claymore Convertible on September 20, 2024 and sell it today you would lose (2.00) from holding Advent Claymore Convertible or give up 0.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Advent Claymore Convertible  vs.  Federated Hermes Inflation

 Performance 
       Timeline  
Advent Claymore Conv 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Advent Claymore Convertible are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent basic indicators, Advent Claymore is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Federated Hermes Inf 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Federated Hermes Inflation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Federated Hermes is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Advent Claymore and Federated Hermes Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Advent Claymore and Federated Hermes

The main advantage of trading using opposite Advent Claymore and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Federated Hermes 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 Federated Hermes will offset losses from the drop in Federated Hermes' long position.
The idea behind Advent Claymore Convertible and Federated Hermes Inflation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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