Correlation Between Advent Claymore and Smallcap Growth

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

Diversification Opportunities for Advent Claymore and Smallcap Growth

0.93

Correlation Coefficient

Advent Claymore  Smallcap Growth

Almost no diversification

The 3 months correlation between Advent and Smallcap is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Smallcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Growth 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 Smallcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Growth has no effect on the direction of Advent Claymore i.e., Advent Claymore and Smallcap Growth go up and down completely randomly.

Pair Corralation between Advent Claymore and Smallcap Growth

Assuming the 90 days horizon Advent Claymore is expected to generate 2.06 times less return on investment than Smallcap Growth. But when comparing it to its historical volatility, Advent Claymore Convertible is 1.68 times less risky than Smallcap Growth. It trades about 0.11 of its potential returns per unit of risk. Smallcap Growth Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,416  in Smallcap Growth Fund on May 15, 2025 and sell it today you would earn a total of  121.00  from holding Smallcap Growth Fund or generate 8.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Advent Claymore Convertible  vs.  Smallcap Growth Fund

Advent Claymore Conv

Risk-Adjusted Performance

Fair

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.

Smallcap Growth

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap Growth Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Smallcap Growth may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Advent Claymore and Smallcap Growth

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

The idea behind Advent Claymore Convertible and Smallcap Growth 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.