Correlation Between Virtus Convertible and American Beacon
Can any of the company-specific risk be diversified away by investing in both Virtus Convertible and American Beacon 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 American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Convertible and American Beacon Shapiro, you can compare the effects of market volatilities on Virtus Convertible and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Convertible and American Beacon.
Diversification Opportunities for Virtus Convertible and American Beacon
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Convertible and American Beacon Shapiro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Shapiro 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Shapiro has no effect on the direction of Virtus Convertible i.e., Virtus Convertible and American Beacon go up and down completely randomly.
Pair Corralation between Virtus Convertible and American Beacon
Assuming the 90 days horizon Virtus Convertible is expected to generate 0.51 times more return on investment than American Beacon. However, Virtus Convertible is 1.98 times less risky than American Beacon. It trades about 0.11 of its potential returns per unit of risk. American Beacon Shapiro is currently generating about 0.04 per unit of risk. If you would invest 2,966 in Virtus Convertible on September 12, 2024 and sell it today you would earn a total of 717.00 from holding Virtus Convertible or generate 24.17% 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. American Beacon Shapiro
Performance |
| Timeline |
| Virtus Convertible |
| American Beacon Shapiro |
Virtus Convertible and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Convertible and American Beacon
The main advantage of trading using opposite Virtus Convertible and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Convertible position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Virtus Convertible vs. Acm Dynamic Opportunity | Virtus Convertible vs. Leggmason Partners Institutional | Virtus Convertible vs. Arrow Managed Futures | Virtus Convertible vs. Volumetric Fund Volumetric |
| American Beacon vs. Allianzgi Convertible Income | American Beacon vs. Virtus Convertible | American Beacon vs. Lord Abbett Convertible | American Beacon vs. Fidelity Sai Convertible |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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