Correlation Between Vy(r) Clarion and Leisure Fund

Can any of the company-specific risk be diversified away by investing in both Vy(r) Clarion and Leisure Fund 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 Vy(r) Clarion and Leisure Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vy Clarion Real and Leisure Fund Class, you can compare the effects of market volatilities on Vy(r) Clarion and Leisure Fund 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 Vy(r) Clarion with a short position of Leisure Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vy(r) Clarion and Leisure Fund.

Diversification Opportunities for Vy(r) Clarion and Leisure Fund

0.74

Correlation Coefficient

Vy(r) Clarion  Leisure Fund

Poor diversification

The 3 months correlation between Vy(r) and Leisure is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Vy Clarion Real and Leisure Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leisure Fund Class and Vy(r) Clarion 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 Vy Clarion Real are associated (or correlated) with Leisure Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leisure Fund Class has no effect on the direction of Vy(r) Clarion i.e., Vy(r) Clarion and Leisure Fund go up and down completely randomly.

Pair Corralation between Vy(r) Clarion and Leisure Fund

Assuming the 90 days horizon Vy Clarion Real is expected to generate 0.98 times more return on investment than Leisure Fund. However, Vy Clarion Real is 1.02 times less risky than Leisure Fund. It trades about 0.0 of its potential returns per unit of risk. Leisure Fund Class is currently generating about -0.02 per unit of risk. If you would invest  2,614  in Vy Clarion Real on December 21, 2024 and sell it today you would lose (4.00) from holding Vy Clarion Real or give up 0.15% of portfolio value over 90 days.

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

Vy Clarion Real  vs.  Leisure Fund Class

Vy Clarion Real

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vy Clarion Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Vy(r) Clarion is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Leisure Fund Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Leisure Fund Class has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Leisure Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vy(r) Clarion and Leisure Fund

The main advantage of trading using opposite Vy(r) Clarion and Leisure Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vy(r) Clarion position performs unexpectedly, Leisure Fund 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 Leisure Fund will offset losses from the drop in Leisure Fund's long position.

The idea behind Vy Clarion Real and Leisure Fund Class 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.