Correlation Between Advent Claymore and Short Term

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

Diversification Opportunities for Advent Claymore and Short Term

0.89

Correlation Coefficient

Advent Claymore  Short Term

Very poor diversification

The 3 months correlation between Advent and Short is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and The Short Term Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term 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 Short Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term has no effect on the direction of Advent Claymore i.e., Advent Claymore and Short Term go up and down completely randomly.

Pair Corralation between Advent Claymore and Short Term

Assuming the 90 days horizon Advent Claymore Convertible is expected to generate 10.89 times more return on investment than Short Term. However, Advent Claymore is 10.89 times more volatile than The Short Term Municipal. It trades about 0.25 of its potential returns per unit of risk. The Short Term Municipal is currently generating about 0.33 per unit of risk. If you would invest  1,159  in Advent Claymore Convertible on April 30, 2025 and sell it today you would earn a total of  123.00  from holding Advent Claymore Convertible or generate 10.61% 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.  The Short Term Municipal

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.

Short Term

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Short Term Municipal are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Short Term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Advent Claymore and Short Term

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

The idea behind Advent Claymore Convertible and The Short Term Municipal 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.