Correlation Between Advent Claymore and Lord Abbett

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

Diversification Opportunities for Advent Claymore and Lord Abbett

AdventLordDiversified AwayAdventLordDiversified Away100%
0.89
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Advent and Lord is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Lord Abbett Vertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Vertible 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 Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Vertible has no effect on the direction of Advent Claymore i.e., Advent Claymore and Lord Abbett go up and down completely randomly.

Pair Corralation between Advent Claymore and Lord Abbett

Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 1.86 times more return on investment than Lord Abbett. However, Advent Claymore is 1.86 times more volatile than Lord Abbett Vertible. It trades about 0.08 of its potential returns per unit of risk. Lord Abbett Vertible is currently generating about 0.08 per unit of risk. If you would invest  832.00  in Advent Claymore Convertible on September 13, 2024 and sell it today you would earn a total of  416.00  from holding Advent Claymore Convertible or generate 50.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Advent Claymore Convertible  vs.  Lord Abbett Vertible

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -50510
JavaScript chart by amCharts 3.21.15AVK LACCX
       Timeline  
Advent Claymore Conv 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Advent Claymore Convertible are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. Despite quite unsteady basic indicators, Advent Claymore may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1111.211.411.611.81212.212.4
Lord Abbett Vertible 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Vertible are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Lord Abbett may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec13.413.613.81414.214.414.614.8

Advent Claymore and Lord Abbett Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.77-2.08-1.38-0.680.01250.751.52.252.99 0.51.01.5
JavaScript chart by amCharts 3.21.15AVK LACCX
       Returns  

Pair Trading with Advent Claymore and Lord Abbett

The main advantage of trading using opposite Advent Claymore and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.
The idea behind Advent Claymore Convertible and Lord Abbett Vertible 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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