Correlation Between VIIX and ClearBridge Dividend

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

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

Diversification Opportunities for VIIX and ClearBridge Dividend

0.0

Correlation Coefficient

VIIX  ClearBridge Dividend

Pay attention - limited upside

The 3 months correlation between VIIX and ClearBridge is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VIIX and ClearBridge Dividend Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearBridge Dividend and VIIX 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 VIIX 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 VIIX i.e., VIIX and ClearBridge Dividend go up and down completely randomly.

Pair Corralation between VIIX and ClearBridge Dividend

If you would invest  5,079  in ClearBridge Dividend Strategy on December 30, 2024 and sell it today you would earn a total of  43.00  from holding ClearBridge Dividend Strategy or generate 0.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

VIIX  vs.  ClearBridge Dividend Strategy

VIIX

Risk-Adjusted Performance

Very Weak

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

ClearBridge Dividend

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ClearBridge Dividend Strategy are ranked lower than 1 (%) 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 VIIX and ClearBridge Dividend

The main advantage of trading using opposite VIIX and ClearBridge Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIIX 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 VIIX 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.