Correlation Between Virtus Global and Western Asset
Can any of the company-specific risk be diversified away by investing in both Virtus Global and Western Asset 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 Global and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Global Multi and Western Asset Global, you can compare the effects of market volatilities on Virtus Global and Western Asset 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 Global with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Global and Western Asset.
Diversification Opportunities for Virtus Global and Western Asset
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virtus and Western is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Global Multi and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Virtus Global 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 Global Multi are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of Virtus Global i.e., Virtus Global and Western Asset go up and down completely randomly.
Pair Corralation between Virtus Global and Western Asset
Considering the 90-day investment horizon Virtus Global Multi is expected to generate 0.8 times more return on investment than Western Asset. However, Virtus Global Multi is 1.25 times less risky than Western Asset. It trades about 0.24 of its potential returns per unit of risk. Western Asset Global is currently generating about -0.14 per unit of risk. If you would invest 784.00 in Virtus Global Multi on August 31, 2024 and sell it today you would earn a total of 18.00 from holding Virtus Global Multi or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Global Multi vs. Western Asset Global
Performance |
| Timeline |
| Virtus Global Multi |
| Western Asset Global |
Virtus Global and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Global and Western Asset
The main advantage of trading using opposite Virtus Global and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Global position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Virtus Global vs. Brandywineglobal Globalome Opportunities | Virtus Global vs. RiverNorth Specialty Finance | Virtus Global vs. Western Asset Mortgage | Virtus Global vs. Stone Harbor Emerging |
| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
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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