Correlation Between Virtus Bond and Virtus High
Can any of the company-specific risk be diversified away by investing in both Virtus Bond 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 Bond 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 Bond Fund and Virtus High Yield, you can compare the effects of market volatilities on Virtus Bond 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 Bond with a short position of Virtus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Bond and Virtus High.
Diversification Opportunities for Virtus Bond and Virtus High
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Virtus and VIRTUS is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Bond Fund 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 Bond 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 Bond Fund 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 Bond i.e., Virtus Bond and Virtus High go up and down completely randomly.
Pair Corralation between Virtus Bond and Virtus High
Assuming the 90 days horizon Virtus Bond Fund is expected to generate 1.64 times more return on investment than Virtus High. However, Virtus Bond is 1.64 times more volatile than Virtus High Yield. It trades about 0.12 of its potential returns per unit of risk. Virtus High Yield is currently generating about 0.14 per unit of risk. If you would invest 1,024 in Virtus Bond Fund on September 4, 2024 and sell it today you would earn a total of 8.00 from holding Virtus Bond Fund or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Virtus Bond Fund vs. Virtus High Yield
Performance |
| Timeline |
| Virtus Bond Fund |
| Virtus High Yield |
Virtus Bond and Virtus High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Bond and Virtus High
The main advantage of trading using opposite Virtus Bond and Virtus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Bond 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 Bond vs. Goldman Sachs Real | Virtus Bond vs. Real Estate Ultrasector | Virtus Bond vs. Virtus Real Estate | Virtus Bond vs. Prudential Real Estate |
| Virtus High vs. Columbia Real Estate | Virtus High vs. Deutsche Real Estate | Virtus High vs. Virtus Real Estate | Virtus High vs. Sa Real Estate |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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