Correlation Between Virtus Convertible and Virtus High
Can any of the company-specific risk be diversified away by investing in both Virtus Convertible 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 Convertible 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 Convertible and Virtus High Yield, you can compare the effects of market volatilities on Virtus Convertible 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 Convertible with a short position of Virtus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Convertible and Virtus High.
Diversification Opportunities for Virtus Convertible and Virtus High
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and Virtus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Convertible 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 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 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 Convertible i.e., Virtus Convertible and Virtus High go up and down completely randomly.
Pair Corralation between Virtus Convertible and Virtus High
Assuming the 90 days horizon Virtus Convertible is expected to generate 5.52 times more return on investment than Virtus High. However, Virtus Convertible is 5.52 times more volatile than Virtus High Yield. It trades about 0.25 of its potential returns per unit of risk. Virtus High Yield is currently generating about 0.22 per unit of risk. If you would invest 3,581 in Virtus Convertible on September 14, 2024 and sell it today you would earn a total of 119.00 from holding Virtus Convertible or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Convertible vs. Virtus High Yield
Performance |
| Timeline |
| Virtus Convertible |
| Virtus High Yield |
Virtus Convertible and Virtus High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Convertible and Virtus High
The main advantage of trading using opposite Virtus Convertible and Virtus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Convertible 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 Convertible vs. Fisher Large Cap | Virtus Convertible vs. Old Westbury Large | Virtus Convertible vs. Touchstone Large Cap | Virtus Convertible vs. Rational Strategic Allocation |
| Virtus High vs. Ab Small Cap | Virtus High vs. Sp Smallcap 600 | Virtus High vs. Kinetics Small Cap | Virtus High vs. Siit Small Mid |
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 CEOs Directory module to screen CEOs from public companies around the world.
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