Correlation Between Virtus High and Strategic Income
Can any of the company-specific risk be diversified away by investing in both Virtus High and Strategic Income 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 Strategic Income 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 Strategic Income Opportunities, you can compare the effects of market volatilities on Virtus High and Strategic Income 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 Strategic Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus High and Strategic Income.
Diversification Opportunities for Virtus High and Strategic Income
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Virtus and Strategic is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Virtus High Yield and Strategic Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Income Opp 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 Strategic Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Income Opp has no effect on the direction of Virtus High i.e., Virtus High and Strategic Income go up and down completely randomly.
Pair Corralation between Virtus High and Strategic Income
Assuming the 90 days horizon Virtus High Yield is expected to generate 1.16 times more return on investment than Strategic Income. However, Virtus High is 1.16 times more volatile than Strategic Income Opportunities. It trades about 0.11 of its potential returns per unit of risk. Strategic Income Opportunities is currently generating about 0.08 per unit of risk. If you would invest 321.00 in Virtus High Yield on September 4, 2024 and sell it today you would earn a total of 61.00 from holding Virtus High Yield or generate 19.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Virtus High Yield vs. Strategic Income Opportunities
Performance |
| Timeline |
| Virtus High Yield |
| Strategic Income Opp |
Virtus High and Strategic Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus High and Strategic Income
The main advantage of trading using opposite Virtus High and Strategic Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus High position performs unexpectedly, Strategic Income 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 Strategic Income will offset losses from the drop in Strategic Income's long position.| Virtus High vs. Alger Health Sciences | Virtus High vs. Fidelity Advisor Health | Virtus High vs. Baron Health Care | Virtus High vs. Deutsche Health And |
| Strategic Income vs. Regional Bank Fund | Strategic Income vs. Regional Bank Fund | Strategic Income vs. Multimanager Lifestyle Moderate | Strategic Income vs. Multimanager Lifestyle Balanced |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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