Correlation Between Advent Claymore and Capital Growth
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Capital Growth 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 Capital Growth 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 Capital Growth Fund, you can compare the effects of market volatilities on Advent Claymore and Capital Growth 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 Capital Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Capital Growth.
Diversification Opportunities for Advent Claymore and Capital Growth
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advent and Capital is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Capital Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Growth 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 Capital Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Growth has no effect on the direction of Advent Claymore i.e., Advent Claymore and Capital Growth go up and down completely randomly.
Pair Corralation between Advent Claymore and Capital Growth
Considering the 90-day investment horizon Advent Claymore Convertible is expected to generate 0.59 times more return on investment than Capital Growth. However, Advent Claymore Convertible is 1.69 times less risky than Capital Growth. It trades about 0.14 of its potential returns per unit of risk. Capital Growth Fund is currently generating about -0.14 per unit of risk. If you would invest 1,111 in Advent Claymore Convertible on September 26, 2024 and sell it today you would earn a total of 84.00 from holding Advent Claymore Convertible or generate 7.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Advent Claymore Convertible vs. Capital Growth Fund
Performance |
Timeline |
Advent Claymore Conv |
Capital Growth |
Advent Claymore and Capital Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Advent Claymore and Capital Growth
The main advantage of trading using opposite Advent Claymore and Capital Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Capital Growth 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 Capital Growth will offset losses from the drop in Capital Growth's long position.Advent Claymore vs. Calamos Global Dynamic | Advent Claymore vs. Calamos Strategic Total | Advent Claymore vs. Calamos LongShort Equity | Advent Claymore vs. Eaton Vance Tax |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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