Correlation Between Franklin Dynatech and Virtus Convertible
Can any of the company-specific risk be diversified away by investing in both Franklin Dynatech and Virtus Convertible 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 Franklin Dynatech and Virtus Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Dynatech Fund and Virtus Convertible, you can compare the effects of market volatilities on Franklin Dynatech and Virtus Convertible 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 Franklin Dynatech with a short position of Virtus Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Dynatech and Virtus Convertible.
Diversification Opportunities for Franklin Dynatech and Virtus Convertible
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Virtus is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Dynatech Fund and Virtus Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Convertible and Franklin Dynatech 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 Franklin Dynatech Fund are associated (or correlated) with Virtus Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Convertible has no effect on the direction of Franklin Dynatech i.e., Franklin Dynatech and Virtus Convertible go up and down completely randomly.
Pair Corralation between Franklin Dynatech and Virtus Convertible
Assuming the 90 days horizon Franklin Dynatech is expected to generate 1.34 times less return on investment than Virtus Convertible. In addition to that, Franklin Dynatech is 1.79 times more volatile than Virtus Convertible. It trades about 0.3 of its total potential returns per unit of risk. Virtus Convertible is currently generating about 0.71 per unit of volatility. If you would invest 3,423 in Virtus Convertible on September 1, 2024 and sell it today you would earn a total of 313.00 from holding Virtus Convertible or generate 9.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Franklin Dynatech Fund vs. Virtus Convertible
Performance |
| Timeline |
| Franklin Dynatech |
| Virtus Convertible |
Franklin Dynatech and Virtus Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Dynatech and Virtus Convertible
The main advantage of trading using opposite Franklin Dynatech and Virtus Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Dynatech position performs unexpectedly, Virtus Convertible 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 Virtus Convertible will offset losses from the drop in Virtus Convertible's long position.| Franklin Dynatech vs. Dunham Real Estate | Franklin Dynatech vs. Forum Real Estate | Franklin Dynatech vs. Franklin Real Estate | Franklin Dynatech vs. Msif Real Estate |
| Virtus Convertible vs. Metropolitan West High | Virtus Convertible vs. Pace High Yield | Virtus Convertible vs. Valic Company I | Virtus Convertible vs. Alpine High Yield |
Check out your portfolio center.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.
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