Correlation Between Virtus High and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Virtus High and Sterling Capital 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 High and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus High Yield and Sterling Capital Short, you can compare the effects of market volatilities on Virtus High and Sterling Capital 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 High with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus High and Sterling Capital.
Diversification Opportunities for Virtus High and Sterling Capital
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and Sterling is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Virtus High Yield and Sterling Capital Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Short and Virtus High 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 High Yield are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Short has no effect on the direction of Virtus High i.e., Virtus High and Sterling Capital go up and down completely randomly.
Pair Corralation between Virtus High and Sterling Capital
Assuming the 90 days horizon Virtus High Yield is expected to generate 1.69 times more return on investment than Sterling Capital. However, Virtus High is 1.69 times more volatile than Sterling Capital Short. It trades about 0.23 of its potential returns per unit of risk. Sterling Capital Short is currently generating about 0.12 per unit of risk. If you would invest 367.00 in Virtus High Yield on November 3, 2024 and sell it today you would earn a total of 22.00 from holding Virtus High Yield or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus High Yield vs. Sterling Capital Short
Performance |
| Timeline |
| Virtus High Yield |
| Sterling Capital Short |
Virtus High and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus High and Sterling Capital
The main advantage of trading using opposite Virtus High and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus High position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Virtus High vs. Vanguard High Yield Corporate | Virtus High vs. Vanguard High Yield Porate | Virtus High vs. Blackrock Hi Yld | Virtus High vs. Blackrock High Yield |
| Sterling Capital vs. Advent Claymore Convertible | Sterling Capital vs. Absolute Convertible Arbitrage | Sterling Capital vs. Gabelli Convertible And | Sterling Capital vs. Calamos Dynamic 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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