Correlation Between Advent Claymore and Principal Midcap
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Principal Midcap 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 Principal Midcap 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 Principal Midcap Value, you can compare the effects of market volatilities on Advent Claymore and Principal Midcap 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 Principal Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Principal Midcap.
Diversification Opportunities for Advent Claymore and Principal Midcap
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Advent and Principal is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Principal Midcap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Midcap Value 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 Principal Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Midcap Value has no effect on the direction of Advent Claymore i.e., Advent Claymore and Principal Midcap go up and down completely randomly.
Pair Corralation between Advent Claymore and Principal Midcap
Assuming the 90 days horizon Advent Claymore Convertible is expected to under-perform the Principal Midcap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Advent Claymore Convertible is 1.29 times less risky than Principal Midcap. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Principal Midcap Value is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,623 in Principal Midcap Value on May 25, 2025 and sell it today you would lose (5.00) from holding Principal Midcap Value or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Principal Midcap Value
Performance |
| Timeline |
| Advent Claymore Conv |
| Principal Midcap Value |
Advent Claymore and Principal Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Principal Midcap
The main advantage of trading using opposite Advent Claymore and Principal Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Principal Midcap 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 Principal Midcap will offset losses from the drop in Principal Midcap's long position.| Advent Claymore vs. Prudential High Yield | Advent Claymore vs. Transamerica High Yield | Advent Claymore vs. Strategic Advisers Income | Advent Claymore vs. Prudential High Yield |
| Principal Midcap vs. Aqr Diversified Arbitrage | Principal Midcap vs. Invesco Diversified Dividend | Principal Midcap vs. Lord Abbett Diversified | Principal Midcap vs. Federated Hermes Conservative |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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