Correlation Between VictoryShares International and ClearBridge Dividend

Can any of the company-specific risk be diversified away by investing in both VictoryShares International and ClearBridge Dividend 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 VictoryShares International and ClearBridge Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VictoryShares International Volatility and ClearBridge Dividend Strategy, you can compare the effects of market volatilities on VictoryShares International and ClearBridge Dividend 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 VictoryShares International with a short position of ClearBridge Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of VictoryShares International and ClearBridge Dividend.

Diversification Opportunities for VictoryShares International and ClearBridge Dividend

-0.62

Correlation Coefficient

VictoryShares International  ClearBridge Dividend

Excellent diversification

The 3 months correlation between VictoryShares and ClearBridge is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares International Vo and ClearBridge Dividend Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearBridge Dividend and VictoryShares International 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 VictoryShares International Volatility are associated (or correlated) with ClearBridge Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearBridge Dividend has no effect on the direction of VictoryShares International i.e., VictoryShares International and ClearBridge Dividend go up and down completely randomly.

Pair Corralation between VictoryShares International and ClearBridge Dividend

Considering the 90-day investment horizon VictoryShares International Volatility is expected to under-perform the ClearBridge Dividend. In addition to that, VictoryShares International is 1.13 times more volatile than ClearBridge Dividend Strategy. It trades about -0.04 of its total potential returns per unit of risk. ClearBridge Dividend Strategy is currently generating about 0.14 per unit of volatility. If you would invest  4,932  in ClearBridge Dividend Strategy on September 13, 2024 and sell it today you would earn a total of  281.00  from holding ClearBridge Dividend Strategy or generate 5.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

VictoryShares International Vo  vs.  ClearBridge Dividend Strategy

VictoryShares International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VictoryShares International Volatility has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, VictoryShares International is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

ClearBridge Dividend

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ClearBridge Dividend Strategy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, ClearBridge Dividend is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VictoryShares International and ClearBridge Dividend

The main advantage of trading using opposite VictoryShares International and ClearBridge Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VictoryShares International position performs unexpectedly, ClearBridge Dividend 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 ClearBridge Dividend will offset losses from the drop in ClearBridge Dividend's long position.

The idea behind VictoryShares International Volatility and ClearBridge Dividend Strategy 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.