Correlation Between Virtus Senior and Virtus High
Can any of the company-specific risk be diversified away by investing in both Virtus Senior 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 Virtus Senior and Virtus High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Senior Floating and Virtus High Yield, you can compare the effects of market volatilities on Virtus Senior 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 Virtus Senior with a short position of Virtus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Senior and Virtus High.
Diversification Opportunities for Virtus Senior and Virtus High
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and Virtus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Senior Floating 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 Virtus Senior 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 Senior Floating 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 Virtus Senior i.e., Virtus Senior and Virtus High go up and down completely randomly.
Pair Corralation between Virtus Senior and Virtus High
Assuming the 90 days horizon Virtus Senior is expected to generate 1.2 times less return on investment than Virtus High. But when comparing it to its historical volatility, Virtus Senior Floating is 1.82 times less risky than Virtus High. It trades about 0.25 of its potential returns per unit of risk. Virtus High Yield is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 383.00 in Virtus High Yield on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Virtus High Yield or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Senior Floating vs. Virtus High Yield
Performance |
| Timeline |
| Virtus Senior Floating |
| Virtus High Yield |
Virtus Senior and Virtus High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Senior and Virtus High
The main advantage of trading using opposite Virtus Senior and Virtus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Senior 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.| Virtus Senior vs. Sa Real Estate | Virtus Senior vs. Dunham Real Estate | Virtus Senior vs. Forum Real Estate | Virtus Senior vs. Virtus Real Estate |
| Virtus High vs. Baird Strategic Municipal | Virtus High vs. Blrc Sgy Mnp | Virtus High vs. Ab Impact Municipal | Virtus High vs. Bbh Intermediate Municipal |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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