Correlation Between Advent Claymore and Deutsche Health

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

Diversification Opportunities for Advent Claymore and Deutsche Health

0.62

Correlation Coefficient

Advent Claymore  Deutsche Health

Poor diversification

The 3 months correlation between Advent and Deutsche is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Deutsche Health And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Health And 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 Deutsche Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Health And has no effect on the direction of Advent Claymore i.e., Advent Claymore and Deutsche Health go up and down completely randomly.

Pair Corralation between Advent Claymore and Deutsche Health

Considering the 90-day investment horizon Advent Claymore Convertible is expected to under-perform the Deutsche Health. But the fund apears to be less risky and, when comparing its historical volatility, Advent Claymore Convertible is 1.04 times less risky than Deutsche Health. The fund trades about -0.21 of its potential returns per unit of risk. The Deutsche Health And is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  4,324  in Deutsche Health And on December 22, 2024 and sell it today you would lose (57.00) from holding Deutsche Health And or give up 1.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Advent Claymore Convertible  vs.  Deutsche Health And

Advent Claymore Conv

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Claymore Convertible are ranked lower than 3 (%) 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.

Deutsche Health And

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Health And are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Deutsche Health 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 Deutsche Health

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

The idea behind Advent Claymore Convertible and Deutsche Health And 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.