Correlation Between Advent Claymore and Tiaa Cref

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

Diversification Opportunities for Advent Claymore and Tiaa Cref

0.72

Correlation Coefficient

Advent Claymore  Tiaa Cref

Poor diversification

The 3 months correlation between Advent and Tiaa is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Tiaa Cref Lifecycle Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Lifecycle 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 Tiaa Cref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Lifecycle has no effect on the direction of Advent Claymore i.e., Advent Claymore and Tiaa Cref go up and down completely randomly.

Pair Corralation between Advent Claymore and Tiaa Cref

Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 1.36 times more return on investment than Tiaa Cref. However, Advent Claymore is 1.36 times more volatile than Tiaa Cref Lifecycle Index. It trades about 0.08 of its potential returns per unit of risk. Tiaa Cref Lifecycle Index is currently generating about 0.1 per unit of risk. If you would invest  813.00  in Advent Claymore Convertible on September 17, 2024 and sell it today you would earn a total of  410.00  from holding Advent Claymore Convertible or generate 50.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Advent Claymore Convertible  vs.  Tiaa Cref Lifecycle Index

Advent Claymore Conv

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Claymore Convertible are ranked lower than 13 (%) 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.

Tiaa Cref Lifecycle

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Lifecycle Index are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Tiaa Cref 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 Tiaa Cref

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

The idea behind Advent Claymore Convertible and Tiaa Cref Lifecycle Index 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.