Correlation Between Six Circles and Virtus High
Can any of the company-specific risk be diversified away by investing in both Six Circles 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 Six Circles and Virtus High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Six Circles Credit and Virtus High Yield, you can compare the effects of market volatilities on Six Circles 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 Six Circles with a short position of Virtus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Six Circles and Virtus High.
Diversification Opportunities for Six Circles and Virtus High
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Six and Virtus is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Six Circles Credit 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 Six Circles 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 Six Circles Credit 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 Six Circles i.e., Six Circles and Virtus High go up and down completely randomly.
Pair Corralation between Six Circles and Virtus High
Assuming the 90 days horizon Six Circles Credit is expected to generate 0.76 times more return on investment than Virtus High. However, Six Circles Credit is 1.31 times less risky than Virtus High. It trades about 0.46 of its potential returns per unit of risk. Virtus High Yield is currently generating about 0.08 per unit of risk. If you would invest 888.00 in Six Circles Credit on December 5, 2024 and sell it today you would earn a total of 10.00 from holding Six Circles Credit or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Six Circles Credit vs. Virtus High Yield
Performance |
| Timeline |
| Six Circles Credit |
| Virtus High Yield |
Six Circles and Virtus High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Six Circles and Virtus High
The main advantage of trading using opposite Six Circles and Virtus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Six Circles 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.| Six Circles vs. Us Government Securities | ||
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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