Correlation Between Advent Claymore and Voya Prime

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

Diversification Opportunities for Advent Claymore and Voya Prime

0.93

Correlation Coefficient

Advent Claymore  Voya Prime

Almost no diversification

The 3 months correlation between Advent and Voya is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Voya Prime Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Prime Rate 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 Voya Prime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Prime Rate has no effect on the direction of Advent Claymore i.e., Advent Claymore and Voya Prime go up and down completely randomly.

Pair Corralation between Advent Claymore and Voya Prime

Considering the 90-day investment horizon Advent Claymore Convertible is expected to under-perform the Voya Prime. In addition to that, Advent Claymore is 1.28 times more volatile than Voya Prime Rate. It trades about -0.01 of its total potential returns per unit of risk. Voya Prime Rate is currently generating about 0.14 per unit of volatility. If you would invest  756.00  in Voya Prime Rate on September 24, 2024 and sell it today you would earn a total of  17.00  from holding Voya Prime Rate or generate 2.25% return on investment over 90 days.

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

Advent Claymore Convertible  vs.  Voya Prime Rate

Advent Claymore Conv

Risk-Adjusted Performance

9 of 100

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.

Voya Prime Rate

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Prime Rate are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Voya Prime may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Advent Claymore and Voya Prime

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

The idea behind Advent Claymore Convertible and Voya Prime Rate 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.