Correlation Between Advent Claymore and Technology Ultrasector
Can any of the company-specific risk be diversified away by investing in both Advent Claymore and Technology Ultrasector 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 Technology Ultrasector 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 Technology Ultrasector Profund, you can compare the effects of market volatilities on Advent Claymore and Technology Ultrasector 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 Technology Ultrasector. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advent Claymore and Technology Ultrasector.
Diversification Opportunities for Advent Claymore and Technology Ultrasector
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Advent and Technology is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Technology Ultrasector Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technology Ultrasector 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 Technology Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technology Ultrasector has no effect on the direction of Advent Claymore i.e., Advent Claymore and Technology Ultrasector go up and down completely randomly.
Pair Corralation between Advent Claymore and Technology Ultrasector
Assuming the 90 days horizon Advent Claymore is expected to generate 15.41 times less return on investment than Technology Ultrasector. But when comparing it to its historical volatility, Advent Claymore Convertible is 3.15 times less risky than Technology Ultrasector. It trades about 0.02 of its potential returns per unit of risk. Technology Ultrasector Profund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,178 in Technology Ultrasector Profund on March 21, 2025 and sell it today you would earn a total of 537.00 from holding Technology Ultrasector Profund or generate 16.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advent Claymore Convertible vs. Technology Ultrasector Profund
Performance |
| Timeline |
| Advent Claymore Conv |
| Technology Ultrasector |
Advent Claymore and Technology Ultrasector Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advent Claymore and Technology Ultrasector
The main advantage of trading using opposite Advent Claymore and Technology Ultrasector positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Technology Ultrasector 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 Technology Ultrasector will offset losses from the drop in Technology Ultrasector's long position.| Advent Claymore vs. Versatile Bond Portfolio | Advent Claymore vs. Enhanced Fixed Income | Advent Claymore vs. Ab Bond Inflation | Advent Claymore vs. Intermediate Bond Fund |
| Technology Ultrasector vs. Lord Abbett Short | Technology Ultrasector vs. Segall Bryant Hamill | Technology Ultrasector vs. Leader Short Term Bond | Technology Ultrasector vs. Nuveen Short Term |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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