Correlation Between Payden High and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Payden High 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 Payden High and Advent Claymore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden High Income and Advent Claymore Convertible, you can compare the effects of market volatilities on Payden High 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 Payden High with a short position of Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden High and Advent Claymore.
Diversification Opportunities for Payden High and Advent Claymore
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Payden and Advent is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Payden High Income 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 Payden High 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 Payden High Income 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 Payden High i.e., Payden High and Advent Claymore go up and down completely randomly.
Pair Corralation between Payden High and Advent Claymore
Assuming the 90 days horizon Payden High is expected to generate 2.54 times less return on investment than Advent Claymore. But when comparing it to its historical volatility, Payden High Income is 4.12 times less risky than Advent Claymore. It trades about 0.39 of its potential returns per unit of risk. Advent Claymore Convertible is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,162 in Advent Claymore Convertible on April 29, 2025 and sell it today you would earn a total of 120.00 from holding Advent Claymore Convertible or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden High Income vs. Advent Claymore Convertible
Performance |
| Timeline |
| Payden High Income |
| Advent Claymore Conv |
Payden High and Advent Claymore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden High and Advent Claymore
The main advantage of trading using opposite Payden High and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden High 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.| Payden High vs. Enhanced Fixed Income | Payden High vs. Artisan High Income | Payden High vs. Barings High Yield | Payden High vs. The National Tax Free |
| Advent Claymore vs. Seafarer Overseas Growth | Advent Claymore vs. Ab All Market | Advent Claymore vs. Saat Market Growth | Advent Claymore vs. Brandes Emerging Markets |
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.
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