Correlation Between Virtus High and Franklin High
Can any of the company-specific risk be diversified away by investing in both Virtus High 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 High 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 High Yield and Franklin High Yield, you can compare the effects of market volatilities on Virtus High 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 High with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus High and Franklin High.
Diversification Opportunities for Virtus High and Franklin High
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtus and Franklin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Virtus High Yield and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Virtus High 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 High Yield 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 Yield has no effect on the direction of Virtus High i.e., Virtus High and Franklin High go up and down completely randomly.
Pair Corralation between Virtus High and Franklin High
Assuming the 90 days horizon Virtus High Yield is expected to generate 0.64 times more return on investment than Franklin High. However, Virtus High Yield is 1.55 times less risky than Franklin High. It trades about -0.29 of its potential returns per unit of risk. Franklin High Yield is currently generating about -0.43 per unit of risk. If you would invest 390.00 in Virtus High Yield on October 12, 2024 and sell it today you would lose (4.00) from holding Virtus High Yield or give up 1.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus High Yield vs. Franklin High Yield
Performance |
| Timeline |
| Virtus High Yield |
| Franklin High Yield |
Virtus High and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus High and Franklin High
The main advantage of trading using opposite Virtus High and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus High 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 High vs. Ridgeworth Seix Government | Virtus High vs. Lord Abbett Government | Virtus High vs. Dws Government Money | Virtus High vs. Virtus Seix Government |
| Franklin High vs. Millerhoward High Income | Franklin High vs. Virtus High Yield | Franklin High vs. Multi Manager High Yield | Franklin High vs. Inverse 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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