Correlation Between Barings Active and Virtus Low
Can any of the company-specific risk be diversified away by investing in both Barings Active and Virtus Low 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 Barings Active and Virtus Low into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Virtus Low Duration, you can compare the effects of market volatilities on Barings Active and Virtus Low 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 Barings Active with a short position of Virtus Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Virtus Low.
Diversification Opportunities for Barings Active and Virtus Low
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Virtus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Virtus Low Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Low Duration and Barings Active 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 Barings Active Short are associated (or correlated) with Virtus Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Low Duration has no effect on the direction of Barings Active i.e., Barings Active and Virtus Low go up and down completely randomly.
Pair Corralation between Barings Active and Virtus Low
Assuming the 90 days horizon Barings Active Short is expected to generate 1.03 times more return on investment than Virtus Low. However, Barings Active is 1.03 times more volatile than Virtus Low Duration. It trades about 0.17 of its potential returns per unit of risk. Virtus Low Duration is currently generating about 0.16 per unit of risk. If you would invest 811.00 in Barings Active Short on September 2, 2024 and sell it today you would earn a total of 114.00 from holding Barings Active Short or generate 14.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Virtus Low Duration
Performance |
| Timeline |
| Barings Active Short |
| Virtus Low Duration |
Barings Active and Virtus Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Virtus Low
The main advantage of trading using opposite Barings Active and Virtus Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active position performs unexpectedly, Virtus Low 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 Low will offset losses from the drop in Virtus Low's long position.| Barings Active vs. Calamos Dynamic Convertible | Barings Active vs. Ab Bond Inflation | Barings Active vs. Blrc Sgy Mnp | Barings Active vs. Artisan High Income |
| Virtus Low vs. Virtus Multi Strategy Target | Virtus Low vs. Virtus Multi Sector Short | Virtus Low vs. Ridgeworth Seix High | Virtus Low vs. Ridgeworth Innovative Growth |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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