Correlation Between Virtus Convertible and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Virtus Convertible and Mid Cap 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 Mid Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Convertible and Mid Cap Strategic, you can compare the effects of market volatilities on Virtus Convertible and Mid Cap 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 Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Convertible and Mid Cap.
Diversification Opportunities for Virtus Convertible and Mid Cap
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Virtus and Mid is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Convertible and Mid Cap Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Strategic 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 Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Strategic has no effect on the direction of Virtus Convertible i.e., Virtus Convertible and Mid Cap go up and down completely randomly.
Pair Corralation between Virtus Convertible and Mid Cap
Assuming the 90 days horizon Virtus Convertible is expected to generate 0.68 times more return on investment than Mid Cap. However, Virtus Convertible is 1.48 times less risky than Mid Cap. It trades about 0.24 of its potential returns per unit of risk. Mid Cap Strategic is currently generating about 0.08 per unit of risk. If you would invest 3,594 in Virtus Convertible on September 13, 2024 and sell it today you would earn a total of 116.00 from holding Virtus Convertible or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Virtus Convertible vs. Mid Cap Strategic
Performance |
| Timeline |
| Virtus Convertible |
| Mid Cap Strategic |
Virtus Convertible and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Convertible and Mid Cap
The main advantage of trading using opposite Virtus Convertible and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Convertible position performs unexpectedly, Mid Cap 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 Mid Cap will offset losses from the drop in Mid Cap's long position.| Virtus Convertible vs. Investec Emerging Markets | Virtus Convertible vs. Siit Emerging Markets | Virtus Convertible vs. Western Asset Diversified | Virtus Convertible vs. Artisan Emerging Markets |
| Mid Cap vs. Mid Cap Index | Mid Cap vs. Valic Company I | Mid Cap vs. Valic Company I | Mid Cap vs. Stock Index Fund |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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