Correlation Between Virtus High and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Virtus High and Legg Mason 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 Legg Mason 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 Legg Mason Partners, you can compare the effects of market volatilities on Virtus High and Legg Mason 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 Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus High and Legg Mason.
Diversification Opportunities for Virtus High and Legg Mason
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Virtus and Legg is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Virtus High Yield and Legg Mason Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Partners 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 Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Partners has no effect on the direction of Virtus High i.e., Virtus High and Legg Mason go up and down completely randomly.
Pair Corralation between Virtus High and Legg Mason
Assuming the 90 days horizon Virtus High Yield is expected to generate 0.26 times more return on investment than Legg Mason. However, Virtus High Yield is 3.84 times less risky than Legg Mason. It trades about 0.27 of its potential returns per unit of risk. Legg Mason Partners is currently generating about -0.05 per unit of risk. If you would invest 384.00 in Virtus High Yield on October 23, 2024 and sell it today you would earn a total of 5.00 from holding Virtus High Yield or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Virtus High Yield vs. Legg Mason Partners
Performance |
| Timeline |
| Virtus High Yield |
| Legg Mason Partners |
Virtus High and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus High and Legg Mason
The main advantage of trading using opposite Virtus High and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus High position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason's long position.| Virtus High vs. Schwab Government Money | Virtus High vs. Inverse Government Long | Virtus High vs. Davis Government Bond | Virtus High vs. Dreyfus Government Cash |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |