Correlation Between Advent Claymore and Mondrian Global

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

Diversification Opportunities for Advent Claymore and Mondrian Global

-0.41

Correlation Coefficient

Advent Claymore  Mondrian Global

Very good diversification

The 3 months correlation between Advent and Mondrian is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Mondrian Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mondrian Global Equity 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 Mondrian Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mondrian Global Equity has no effect on the direction of Advent Claymore i.e., Advent Claymore and Mondrian Global go up and down completely randomly.

Pair Corralation between Advent Claymore and Mondrian Global

Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 1.05 times more return on investment than Mondrian Global. However, Advent Claymore is 1.05 times more volatile than Mondrian Global Equity. It trades about -0.17 of its potential returns per unit of risk. Mondrian Global Equity is currently generating about -0.41 per unit of risk. If you would invest  1,223  in Advent Claymore Convertible on October 15, 2024 and sell it today you would lose (46.00) from holding Advent Claymore Convertible or give up 3.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Advent Claymore Convertible  vs.  Mondrian Global Equity

Advent Claymore Conv

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Claymore Convertible are ranked lower than 7 (%) 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.

Mondrian Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mondrian Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Advent Claymore and Mondrian Global

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

The idea behind Advent Claymore Convertible and Mondrian Global Equity 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.