Correlation Between Allianzgi Convertible and Advent Claymore
Can any of the company-specific risk be diversified away by investing in both Allianzgi Convertible 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 Allianzgi Convertible and Advent Claymore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allianzgi Convertible Income and Advent Claymore Convertible, you can compare the effects of market volatilities on Allianzgi Convertible 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 Allianzgi Convertible with a short position of Advent Claymore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and Advent Claymore.
Diversification Opportunities for Allianzgi Convertible and Advent Claymore
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allianzgi and Advent is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible 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 Allianzgi Convertible 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 Allianzgi Convertible 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 Allianzgi Convertible i.e., Allianzgi Convertible and Advent Claymore go up and down completely randomly.
Pair Corralation between Allianzgi Convertible and Advent Claymore
Assuming the 90 days horizon Allianzgi Convertible Income is expected to under-perform the Advent Claymore. But the mutual fund apears to be less risky and, when comparing its historical volatility, Allianzgi Convertible Income is 1.06 times less risky than Advent Claymore. The mutual fund trades about -0.29 of its potential returns per unit of risk. The Advent Claymore Convertible is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,174 in Advent Claymore Convertible on January 26, 2024 and sell it today you would lose (17.00) from holding Advent Claymore Convertible or give up 1.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Allianzgi Convertible Income vs. Advent Claymore Convertible
Performance |
Timeline |
Allianzgi Convertible |
Advent Claymore Conv |
Allianzgi Convertible and Advent Claymore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Allianzgi Convertible and Advent Claymore
The main advantage of trading using opposite Allianzgi Convertible and Advent Claymore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible 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.Allianzgi Convertible vs. Vanguard Total Stock | Allianzgi Convertible vs. Vanguard 500 Index | Allianzgi Convertible vs. Vanguard Total Stock | Allianzgi Convertible vs. Vanguard Total Stock |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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