Correlation Between Advent Claymore and Timothy Large/mid-cap

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

Diversification Opportunities for Advent Claymore and Timothy Large/mid-cap

0.68

Correlation Coefficient

Advent Claymore  Timothy Large/mid-cap

Poor diversification

The 3 months correlation between Advent and Timothy is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Advent Claymore Convertible and Timothy Largemid Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timothy Large/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 Timothy Large/mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timothy Large/mid-cap has no effect on the direction of Advent Claymore i.e., Advent Claymore and Timothy Large/mid-cap go up and down completely randomly.

Pair Corralation between Advent Claymore and Timothy Large/mid-cap

Assuming the 90 days horizon Advent Claymore is expected to generate 1.01 times less return on investment than Timothy Large/mid-cap. But when comparing it to its historical volatility, Advent Claymore Convertible is 1.05 times less risky than Timothy Large/mid-cap. It trades about 0.12 of its potential returns per unit of risk. Timothy Largemid Cap Value is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,569  in Timothy Largemid Cap Value on May 25, 2025 and sell it today you would earn a total of  68.00  from holding Timothy Largemid Cap Value or generate 4.33% 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.  Timothy Largemid Cap Value

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 9 (%) 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.

Timothy Large/mid-cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Timothy Largemid Cap Value are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Timothy Large/mid-cap 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 Timothy Large/mid-cap

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

The idea behind Advent Claymore Convertible and Timothy Largemid Cap Value 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.