Correlation Between Highland Longshort and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Highland Longshort and Advent Claymore 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 Highland Longshort and Advent Claymore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Advent Claymore Convertible, you can compare the effects of market volatilities on Highland Longshort and Advent Claymore 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 Highland Longshort with a short position of Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Longshort and Advent Claymore.
Diversification Opportunities for Highland Longshort and Advent Claymore
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Highland and Advent is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Advent Claymore Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Claymore Conv and Highland Longshort 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 Highland Longshort Healthcare are associated (or correlated) with Advent Claymore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Claymore Conv has no effect on the direction of Highland Longshort i.e., Highland Longshort and Advent Claymore go up and down completely randomly.
Pair Corralation between Highland Longshort and Advent Claymore
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 0.3 times more return on investment than Advent Claymore. However, Highland Longshort Healthcare is 3.38 times less risky than Advent Claymore. It trades about 0.11 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about 0.02 per unit of risk. If you would invest 1,627 in Highland Longshort Healthcare on May 1, 2025 and sell it today you would earn a total of 93.00 from holding Highland Longshort Healthcare or generate 5.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Highland Longshort Healthcare vs. Advent Claymore Convertible
Performance |
Timeline |
Highland Longshort |
Advent Claymore Conv |
Highland Longshort and Advent Claymore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Highland Longshort and Advent Claymore
The main advantage of trading using opposite Highland Longshort and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Longshort position performs unexpectedly, Advent Claymore 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 Advent Claymore will offset losses from the drop in Advent Claymore's long position.Highland Longshort vs. Versatile Bond Portfolio | Highland Longshort vs. Old Westbury California | Highland Longshort vs. Ab Bond Inflation | Highland Longshort vs. Multisector Bond Sma |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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