Correlation Between Virtus High and Western Asset
Can any of the company-specific risk be diversified away by investing in both Virtus High and Western Asset 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 Western Asset 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 Western Asset Smash, you can compare the effects of market volatilities on Virtus High and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus High and Western Asset.
Diversification Opportunities for Virtus High and Western Asset
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and Western is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Virtus High Yield and Western Asset Smash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Smash 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Smash has no effect on the direction of Virtus High i.e., Virtus High and Western Asset go up and down completely randomly.
Pair Corralation between Virtus High and Western Asset
Assuming the 90 days horizon Virtus High Yield is expected to generate 0.71 times more return on investment than Western Asset. However, Virtus High Yield is 1.41 times less risky than Western Asset. It trades about 0.12 of its potential returns per unit of risk. Western Asset Smash is currently generating about 0.03 per unit of risk. If you would invest 318.00 in Virtus High Yield on September 2, 2024 and sell it today you would earn a total of 64.00 from holding Virtus High Yield or generate 20.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus High Yield vs. Western Asset Smash
Performance |
| Timeline |
| Virtus High Yield |
| Western Asset Smash |
Virtus High and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus High and Western Asset
The main advantage of trading using opposite Virtus High and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus High position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Virtus High vs. Ab Bond Inflation | Virtus High vs. Ab Bond Inflation | Virtus High vs. Oklahoma College Savings | Virtus High vs. Nationwide Inflation Protected Securities |
| Western Asset vs. Franklin Mutual Beacon | Western Asset vs. Templeton Developing Markets | Western Asset vs. Franklin Mutual Global | Western Asset vs. Franklin Mutual Global |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |