Correlation Between Virtus Convertible and City National
Can any of the company-specific risk be diversified away by investing in both Virtus Convertible and City National 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 City National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Convertible and City National Rochdale, you can compare the effects of market volatilities on Virtus Convertible and City National 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 City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Convertible and City National.
Diversification Opportunities for Virtus Convertible and City National
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and City is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Convertible and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale 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 City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of Virtus Convertible i.e., Virtus Convertible and City National go up and down completely randomly.
Pair Corralation between Virtus Convertible and City National
Assuming the 90 days horizon Virtus Convertible is expected to generate 1.21 times less return on investment than City National. But when comparing it to its historical volatility, Virtus Convertible is 1.19 times less risky than City National. It trades about 0.18 of its potential returns per unit of risk. City National Rochdale is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,397 in City National Rochdale on September 3, 2024 and sell it today you would earn a total of 695.00 from holding City National Rochdale or generate 20.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Convertible vs. City National Rochdale
Performance |
| Timeline |
| Virtus Convertible |
| City National Rochdale |
Virtus Convertible and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Convertible and City National
The main advantage of trading using opposite Virtus Convertible and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Convertible position performs unexpectedly, City National 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 City National will offset losses from the drop in City National's long position.| Virtus Convertible vs. Franklin Vertible Securities | Virtus Convertible vs. Franklin Vertible Securities | Virtus Convertible vs. Allianzgi Vertible Fund |
| City National vs. The Gabelli Small | City National vs. Jhancock Diversified Macro | City National vs. Wasatch Small Cap | City National vs. Tiaa Cref Smallmid Cap Equity |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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