Correlation Between Virtus Convertible and Franklin High
Can any of the company-specific risk be diversified away by investing in both Virtus Convertible and Franklin High 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 Virtus Convertible and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Convertible and Franklin High Income, you can compare the effects of market volatilities on Virtus Convertible and Franklin High 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 Virtus Convertible with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Convertible and Franklin High.
Diversification Opportunities for Virtus Convertible and Franklin High
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Virtus and Franklin is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Convertible and Franklin High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Income and Virtus Convertible 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 Virtus Convertible are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Income has no effect on the direction of Virtus Convertible i.e., Virtus Convertible and Franklin High go up and down completely randomly.
Pair Corralation between Virtus Convertible and Franklin High
Assuming the 90 days horizon Virtus Convertible is expected to generate 2.98 times more return on investment than Franklin High. However, Virtus Convertible is 2.98 times more volatile than Franklin High Income. It trades about 0.24 of its potential returns per unit of risk. Franklin High Income is currently generating about 0.12 per unit of risk. If you would invest 3,594 in Virtus Convertible on September 13, 2024 and sell it today you would earn a total of 116.00 from holding Virtus Convertible or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Convertible vs. Franklin High Income
Performance |
| Timeline |
| Virtus Convertible |
| Franklin High Income |
Virtus Convertible and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Convertible and Franklin High
The main advantage of trading using opposite Virtus Convertible and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Convertible position performs unexpectedly, Franklin High 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 Franklin High will offset losses from the drop in Franklin High's long position.| Virtus Convertible vs. Investec Emerging Markets | Virtus Convertible vs. Siit Emerging Markets | Virtus Convertible vs. Western Asset Diversified | Virtus Convertible vs. Artisan Emerging Markets |
| Franklin High vs. Virtus Convertible | Franklin High vs. Fidelity Sai Convertible | Franklin High vs. Allianzgi Convertible Income | Franklin High vs. Absolute Convertible Arbitrage |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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