Correlation Between Advent Claymore and Allianzgi Vertible

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

Diversification Opportunities for Advent Claymore and Allianzgi Vertible

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Advent and Allianzgi is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and ALLIANZGI VERTIBLE FUND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Vertible Fund 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 Allianzgi Vertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Vertible Fund has no effect on the direction of Advent Claymore i.e., Advent Claymore and Allianzgi Vertible go up and down completely randomly.

Pair Corralation between Advent Claymore and Allianzgi Vertible

Considering the 90-day investment horizon Advent Claymore is expected to generate 1.49 times less return on investment than Allianzgi Vertible. In addition to that, Advent Claymore is 1.12 times more volatile than Allianzgi Vertible Fund. It trades about 0.15 of its total potential returns per unit of risk. Allianzgi Vertible Fund is currently generating about 0.24 per unit of volatility. If you would invest  3,115  in Allianzgi Vertible Fund on December 30, 2023 and sell it today you would earn a total of  88.00  from holding Allianzgi Vertible Fund or generate 2.83% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.65%
ValuesDaily Returns

Advent Claymore Convertible  vs.  ALLIANZGI VERTIBLE FUND

 Performance 
       Timeline  
Advent Claymore Conv 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Advent Claymore Convertible are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite quite fragile basic indicators, Advent Claymore may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Allianzgi Vertible Fund 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Vertible Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Allianzgi Vertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Advent Claymore and Allianzgi Vertible Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Advent Claymore and Allianzgi Vertible

The main advantage of trading using opposite Advent Claymore and Allianzgi Vertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, Allianzgi Vertible 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 Allianzgi Vertible will offset losses from the drop in Allianzgi Vertible's long position.
The idea behind Advent Claymore Convertible and Allianzgi Vertible Fund 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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