Correlation Between Virtus Bond and Virtus Convertible
Can any of the company-specific risk be diversified away by investing in both Virtus Bond and Virtus Convertible 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 Convertible 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 Convertible, you can compare the effects of market volatilities on Virtus Bond and Virtus Convertible 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 Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Bond and Virtus Convertible.
Diversification Opportunities for Virtus Bond and Virtus Convertible
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Virtus and Virtus is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Bond Fund and Virtus Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Convertible 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 Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Convertible has no effect on the direction of Virtus Bond i.e., Virtus Bond and Virtus Convertible go up and down completely randomly.
Pair Corralation between Virtus Bond and Virtus Convertible
Assuming the 90 days horizon Virtus Bond Fund is expected to under-perform the Virtus Convertible. But the mutual fund apears to be less risky and, when comparing its historical volatility, Virtus Bond Fund is 2.32 times less risky than Virtus Convertible. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Virtus Convertible is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 3,429 in Virtus Convertible on August 24, 2024 and sell it today you would earn a total of 182.00 from holding Virtus Convertible or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Bond Fund vs. Virtus Convertible
Performance |
| Timeline |
| Virtus Bond Fund |
| Virtus Convertible |
Virtus Bond and Virtus Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Bond and Virtus Convertible
The main advantage of trading using opposite Virtus Bond and Virtus Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Bond position performs unexpectedly, Virtus Convertible 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 Convertible will offset losses from the drop in Virtus Convertible's long position.| Virtus Bond vs. Qs Large Cap | Virtus Bond vs. Qs Large Cap | Virtus Bond vs. Jhancock Disciplined Value | Virtus Bond vs. Large Cap Value Profund |
| Virtus Convertible vs. Franklin Vertible Securities | Virtus Convertible vs. Franklin Vertible Securities | Virtus Convertible vs. Fidelity Vertible Securities |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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