Correlation Between Virtus High and Aristotle Funds
Can any of the company-specific risk be diversified away by investing in both Virtus High and Aristotle Funds 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 Virtus High and Aristotle Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus High Yield and Aristotle Funds Series, you can compare the effects of market volatilities on Virtus High and Aristotle Funds 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 Virtus High with a short position of Aristotle Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus High and Aristotle Funds.
Diversification Opportunities for Virtus High and Aristotle Funds
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and Aristotle is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Virtus High Yield and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series and Virtus 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 Virtus High Yield are associated (or correlated) with Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of Virtus High i.e., Virtus High and Aristotle Funds go up and down completely randomly.
Pair Corralation between Virtus High and Aristotle Funds
Assuming the 90 days horizon Virtus High is expected to generate 7.46 times less return on investment than Aristotle Funds. But when comparing it to its historical volatility, Virtus High Yield is 7.89 times less risky than Aristotle Funds. It trades about 0.27 of its potential returns per unit of risk. Aristotle Funds Series is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 749.00 in Aristotle Funds Series on August 29, 2024 and sell it today you would earn a total of 57.00 from holding Aristotle Funds Series or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Virtus High Yield vs. Aristotle Funds Series
Performance |
| Timeline |
| Virtus High Yield |
| Aristotle Funds Series |
Virtus High and Aristotle Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus High and Aristotle Funds
The main advantage of trading using opposite Virtus High and Aristotle Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus High position performs unexpectedly, Aristotle Funds 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 Aristotle Funds will offset losses from the drop in Aristotle Funds' long position.| Virtus High vs. Prudential High Yield | Virtus High vs. HUMANA INC | Virtus High vs. Aquagold International | Virtus High vs. Barloworld Ltd ADR |
| Aristotle Funds vs. Virtus Real Estate | Aristotle Funds vs. Forum Real Estate | Aristotle Funds vs. John Hancock Variable | Aristotle Funds vs. Teachers Insurance And |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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