Correlation Between Virtus Convertible and Voya Global
Can any of the company-specific risk be diversified away by investing in both Virtus Convertible and Voya Global 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 Convertible and Voya Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Convertible and Voya Global Bond, you can compare the effects of market volatilities on Virtus Convertible and Voya Global 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 Convertible with a short position of Voya Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Convertible and Voya Global.
Diversification Opportunities for Virtus Convertible and Voya Global
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Virtus and Voya is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Convertible and Voya Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Global Bond and Virtus Convertible 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 Convertible are associated (or correlated) with Voya Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Global Bond has no effect on the direction of Virtus Convertible i.e., Virtus Convertible and Voya Global go up and down completely randomly.
Pair Corralation between Virtus Convertible and Voya Global
Assuming the 90 days horizon Virtus Convertible is expected to generate 1.57 times more return on investment than Voya Global. However, Virtus Convertible is 1.57 times more volatile than Voya Global Bond. It trades about 0.47 of its potential returns per unit of risk. Voya Global Bond is currently generating about -0.16 per unit of risk. If you would invest 3,458 in Virtus Convertible on August 27, 2024 and sell it today you would earn a total of 228.00 from holding Virtus Convertible or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Convertible vs. Voya Global Bond
Performance |
| Timeline |
| Virtus Convertible |
| Voya Global Bond |
Virtus Convertible and Voya Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Convertible and Voya Global
The main advantage of trading using opposite Virtus Convertible and Voya Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Convertible position performs unexpectedly, Voya Global 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 Voya Global will offset losses from the drop in Voya Global's long position.The idea behind Virtus Convertible and Voya Global Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Voya Global vs. Old Westbury Short Term | Voya Global vs. Ultra Short Term Fixed | Voya Global vs. Ultra Short Fixed Income | Voya Global vs. Barings Active Short |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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