Correlation Between Virtus Convertible and Salient Alternative
Can any of the company-specific risk be diversified away by investing in both Virtus Convertible and Salient Alternative 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 Salient Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Convertible and Salient Alternative Beta, you can compare the effects of market volatilities on Virtus Convertible and Salient Alternative 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 Salient Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Convertible and Salient Alternative.
Diversification Opportunities for Virtus Convertible and Salient Alternative
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and Salient is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Convertible and Salient Alternative Beta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Alternative Beta 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 Salient Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Alternative Beta has no effect on the direction of Virtus Convertible i.e., Virtus Convertible and Salient Alternative go up and down completely randomly.
Pair Corralation between Virtus Convertible and Salient Alternative
Assuming the 90 days horizon Virtus Convertible is expected to generate 0.95 times more return on investment than Salient Alternative. However, Virtus Convertible is 1.05 times less risky than Salient Alternative. It trades about 0.1 of its potential returns per unit of risk. Salient Alternative Beta is currently generating about 0.07 per unit of risk. If you would invest 3,112 in Virtus Convertible on November 8, 2024 and sell it today you would earn a total of 523.00 from holding Virtus Convertible or generate 16.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Convertible vs. Salient Alternative Beta
Performance |
| Timeline |
| Virtus Convertible |
| Salient Alternative Beta |
Virtus Convertible and Salient Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Convertible and Salient Alternative
The main advantage of trading using opposite Virtus Convertible and Salient Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Convertible position performs unexpectedly, Salient Alternative 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 Salient Alternative will offset losses from the drop in Salient Alternative's long position.| Virtus Convertible vs. Gmo Global Equity | Virtus Convertible vs. Old Westbury Fixed | Virtus Convertible vs. Aqr Equity Market | Virtus Convertible vs. The Growth 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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