Correlation Between Virtus Convertible and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Virtus Convertible and Pear Tree 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 Pear Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Convertible and Pear Tree Polaris, you can compare the effects of market volatilities on Virtus Convertible and Pear Tree 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 Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Convertible and Pear Tree.
Diversification Opportunities for Virtus Convertible and Pear Tree
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Virtus and Pear is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Convertible and Pear Tree Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Polaris 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 Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Polaris has no effect on the direction of Virtus Convertible i.e., Virtus Convertible and Pear Tree go up and down completely randomly.
Pair Corralation between Virtus Convertible and Pear Tree
Assuming the 90 days horizon Virtus Convertible is expected to generate 0.85 times more return on investment than Pear Tree. However, Virtus Convertible is 1.17 times less risky than Pear Tree. It trades about 0.36 of its potential returns per unit of risk. Pear Tree Polaris is currently generating about -0.09 per unit of risk. If you would invest 3,289 in Virtus Convertible on September 2, 2024 and sell it today you would earn a total of 433.00 from holding Virtus Convertible or generate 13.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Convertible vs. Pear Tree Polaris
Performance |
| Timeline |
| Virtus Convertible |
| Pear Tree Polaris |
Virtus Convertible and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Convertible and Pear Tree
The main advantage of trading using opposite Virtus Convertible and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Convertible position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.| Virtus Convertible vs. Virtus Multi Strategy Target | Virtus Convertible vs. Virtus Multi Sector Short | Virtus Convertible vs. Ridgeworth Seix High | Virtus Convertible vs. Ridgeworth Innovative Growth |
| Pear Tree vs. Federated Ohio Municipal | Pear Tree vs. Old Westbury Municipal | Pear Tree vs. T Rowe Price | Pear Tree vs. Ishares Municipal Bond |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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