Correlation Between Advent Claymore and First Eagle

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

Diversification Opportunities for Advent Claymore and First Eagle

0.53

Correlation Coefficient

Advent Claymore  First Eagle

Very weak diversification

The 3 months correlation between Advent and First is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and First Eagle Overseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Overseas 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 First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Overseas has no effect on the direction of Advent Claymore i.e., Advent Claymore and First Eagle go up and down completely randomly.

Pair Corralation between Advent Claymore and First Eagle

Assuming the 90 days horizon Advent Claymore Convertible is expected to generate 1.26 times more return on investment than First Eagle. However, Advent Claymore is 1.26 times more volatile than First Eagle Overseas. It trades about 0.25 of its potential returns per unit of risk. First Eagle Overseas is currently generating about 0.22 per unit of risk. If you would invest  1,157  in Advent Claymore Convertible on April 28, 2025 and sell it today you would earn a total of  125.00  from holding Advent Claymore Convertible or generate 10.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Advent Claymore Convertible  vs.  First Eagle Overseas

Advent Claymore Conv

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Claymore Convertible are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, Advent Claymore may actually be approaching a critical reversion point that can send shares even higher in August 2025.

First Eagle Overseas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Eagle Overseas are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, First Eagle may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Advent Claymore and First Eagle

The main advantage of trading using opposite Advent Claymore and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advent Claymore position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.

The idea behind Advent Claymore Convertible and First Eagle Overseas 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.