Correlation Between Advent Claymore and Gamco Global

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

Diversification Opportunities for Advent Claymore and Gamco Global

0.26

Correlation Coefficient

Advent Claymore  Gamco Global

Modest diversification

The 3 months correlation between Advent and Gamco is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and The Gamco Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global 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 Gamco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Global has no effect on the direction of Advent Claymore i.e., Advent Claymore and Gamco Global go up and down completely randomly.

Pair Corralation between Advent Claymore and Gamco Global

Considering the 90-day investment horizon Advent Claymore is expected to generate 3.73 times less return on investment than Gamco Global. But when comparing it to its historical volatility, Advent Claymore Convertible is 1.05 times less risky than Gamco Global. It trades about 0.04 of its potential returns per unit of risk. The Gamco Global is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,473  in The Gamco Global on December 29, 2024 and sell it today you would earn a total of  142.00  from holding The Gamco Global or generate 5.74% 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.  The Gamco Global

Advent Claymore Conv

Risk-Adjusted Performance

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.

Gamco Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gamco Global are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Gamco Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Advent Claymore and Gamco Global

The main advantage of trading using opposite Advent Claymore and Gamco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Gamco Global 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 Gamco Global will offset losses from the drop in Gamco Global's long position.

The idea behind Advent Claymore Convertible and The Gamco Global 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..