Correlation Between Advent Claymore and Clearbridge Mid

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

Diversification Opportunities for Advent Claymore and Clearbridge Mid

0.69

Correlation Coefficient

Advent Claymore  Clearbridge Mid

Poor diversification

The 3 months correlation between Advent and Clearbridge is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Clearbridge Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Mid Cap 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 Clearbridge Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Mid Cap has no effect on the direction of Advent Claymore i.e., Advent Claymore and Clearbridge Mid go up and down completely randomly.

Pair Corralation between Advent Claymore and Clearbridge Mid

Assuming the 90 days horizon Advent Claymore is expected to generate 1.49 times less return on investment than Clearbridge Mid. But when comparing it to its historical volatility, Advent Claymore Convertible is 1.22 times less risky than Clearbridge Mid. It trades about 0.11 of its potential returns per unit of risk. Clearbridge Mid Cap is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3,126  in Clearbridge Mid Cap on May 10, 2025 and sell it today you would earn a total of  186.00  from holding Clearbridge Mid Cap or generate 5.95% return on investment over 90 days.

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

Advent Claymore Convertible  vs.  Clearbridge Mid Cap

Advent Claymore Conv

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advent Claymore Convertible are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Advent Claymore is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clearbridge Mid Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Mid Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Clearbridge Mid 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 Clearbridge Mid

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

The idea behind Advent Claymore Convertible and Clearbridge Mid Cap 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.