Correlation Between Advent Claymore and Qs International | AVK vs. LGFEX

Correlation Between Advent Claymore and Qs International

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

Diversification Opportunities for Advent Claymore and Qs International

AdventLGFEXDiversified AwayAdventLGFEXDiversified Away100%
-0.41
  Correlation Coefficient

Very good diversification

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

Pair Corralation between Advent Claymore and Qs International

Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 0.93 times more return on investment than Qs International. However, Advent Claymore Convertible is 1.07 times less risky than Qs International. It trades about 0.1 of its potential returns per unit of risk. Qs International Equity is currently generating about -0.06 per unit of risk. If you would invest  1,052  in Advent Claymore Convertible on September 24, 2024 and sell it today you would earn a total of  134.00  from holding Advent Claymore Convertible or generate 12.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Advent Claymore Convertible  vs.  Qs International Equity

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50510
JavaScript chart by amCharts 3.21.15AVK LGFEX
       Timeline  
Advent Claymore Conv 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Advent Claymore Convertible are ranked lower than 9 (%) 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1111.211.411.611.81212.212.4
Qs International Equity 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Qs International 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec17.51818.51919.520

Advent Claymore and Qs International Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.86-2.14-1.43-0.710.00.761.522.283.04 0.10.20.30.4
JavaScript chart by amCharts 3.21.15AVK LGFEX
       Returns  

Pair Trading with Advent Claymore and Qs International

The main advantage of trading using opposite Advent Claymore and Qs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Qs International 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 Qs International will offset losses from the drop in Qs International's long position.
The idea behind Advent Claymore Convertible and Qs International 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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