Correlation Between IVH and BFIT
Can any of the company-specific risk be diversified away by investing in both IVH and BFIT 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 IVH and BFIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IVH and BFIT, you can compare the effects of market volatilities on IVH and BFIT 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 IVH with a short position of BFIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of IVH and BFIT.
Diversification Opportunities for IVH and BFIT
Pay attention - limited upside
The 3 months correlation between IVH and BFIT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IVH and BFIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFIT and IVH 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 IVH are associated (or correlated) with BFIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFIT has no effect on the direction of IVH i.e., IVH and BFIT go up and down completely randomly.
Pair Corralation between IVH and BFIT
If you would invest (100.00) in BFIT on November 18, 2024 and sell it today you would earn a total of 100.00 from holding BFIT or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IVH vs. BFIT
Performance |
| Timeline |
| IVH |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| BFIT |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
IVH and BFIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IVH and BFIT
The main advantage of trading using opposite IVH and BFIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IVH position performs unexpectedly, BFIT 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 BFIT will offset losses from the drop in BFIT's long position.| IVH vs. Allianzgi Convertible Income | IVH vs. Cion Investment Corp | IVH vs. Northern Trust | IVH vs. Triplepoint Venture Growth |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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