Correlation Between American High and Virtus High
Can any of the company-specific risk be diversified away by investing in both American High and Virtus 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 American High and Virtus High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American High Income and Virtus High Yield, you can compare the effects of market volatilities on American High and Virtus 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 American High with a short position of Virtus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of American High and Virtus High.
Diversification Opportunities for American High and Virtus High
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Virtus is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding American High Income and Virtus High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus High Yield and American 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 American High Income are associated (or correlated) with Virtus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus High Yield has no effect on the direction of American High i.e., American High and Virtus High go up and down completely randomly.
Pair Corralation between American High and Virtus High
Assuming the 90 days horizon American High Income is expected to generate 1.04 times more return on investment than Virtus High. However, American High is 1.04 times more volatile than Virtus High Yield. It trades about 0.34 of its potential returns per unit of risk. Virtus High Yield is currently generating about 0.25 per unit of risk. If you would invest 971.00 in American High Income on October 29, 2024 and sell it today you would earn a total of 14.00 from holding American High Income or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American High Income vs. Virtus High Yield
Performance |
| Timeline |
| American High Income |
| Virtus High Yield |
American High and Virtus High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American High and Virtus High
The main advantage of trading using opposite American High and Virtus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American High position performs unexpectedly, Virtus 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 Virtus High will offset losses from the drop in Virtus High's long position.| American High vs. Fidelity Advisor Technology | American High vs. Blackrock Science Technology | American High vs. Firsthand Technology Opportunities | American High vs. Icon Information Technology |
| Virtus High vs. Virtus Convertible | Virtus High vs. Allianzgi Convertible Income | Virtus High vs. Columbia Convertible Securities | Virtus High vs. Calamos Dynamic Convertible |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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