Correlation Between VictoryShares Dividend and ClearBridge Dividend

Can any of the company-specific risk be diversified away by investing in both VictoryShares Dividend 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 Dividend 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 Dividend Accelerator and ClearBridge Dividend Strategy, you can compare the effects of market volatilities on VictoryShares Dividend 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 Dividend with a short position of ClearBridge Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of VictoryShares Dividend and ClearBridge Dividend.

Diversification Opportunities for VictoryShares Dividend and ClearBridge Dividend

0.82

Correlation Coefficient

VictoryShares Dividend  ClearBridge Dividend

Very poor diversification

The 3 months correlation between VictoryShares and ClearBridge is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares Dividend Acceler 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 Dividend 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 Dividend Accelerator 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 Dividend i.e., VictoryShares Dividend and ClearBridge Dividend go up and down completely randomly.

Pair Corralation between VictoryShares Dividend and ClearBridge Dividend

Given the investment horizon of 90 days VictoryShares Dividend Accelerator is expected to under-perform the ClearBridge Dividend. In addition to that, VictoryShares Dividend is 1.08 times more volatile than ClearBridge Dividend Strategy. It trades about -0.07 of its total potential returns per unit of risk. ClearBridge Dividend Strategy is currently generating about -0.01 per unit of volatility. If you would invest  5,279  in ClearBridge Dividend Strategy on December 2, 2024 and sell it today you would lose (37.00) from holding ClearBridge Dividend Strategy or give up 0.7% of portfolio value over 90 days.

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

VictoryShares Dividend Acceler  vs.  ClearBridge Dividend Strategy

VictoryShares Dividend

Risk-Adjusted Performance

Very Weak

Over the last 90 days VictoryShares Dividend Accelerator has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, VictoryShares Dividend is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

ClearBridge Dividend

Risk-Adjusted Performance

Very Weak

Over the last 90 days ClearBridge Dividend Strategy has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Dividend and ClearBridge Dividend

The main advantage of trading using opposite VictoryShares Dividend and ClearBridge Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VictoryShares Dividend 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 Dividend Accelerator 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.