Correlation Between Virtus Westchester and Chartwell Short
Can any of the company-specific risk be diversified away by investing in both Virtus Westchester and Chartwell Short 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 Westchester and Chartwell Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Westchester Credit and Chartwell Short Duration, you can compare the effects of market volatilities on Virtus Westchester and Chartwell Short 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 Westchester with a short position of Chartwell Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Westchester and Chartwell Short.
Diversification Opportunities for Virtus Westchester and Chartwell Short
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and Chartwell is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Westchester Credit and Chartwell Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chartwell Short Duration and Virtus Westchester 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 Westchester Credit are associated (or correlated) with Chartwell Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chartwell Short Duration has no effect on the direction of Virtus Westchester i.e., Virtus Westchester and Chartwell Short go up and down completely randomly.
Pair Corralation between Virtus Westchester and Chartwell Short
Assuming the 90 days horizon Virtus Westchester Credit is expected to generate 0.74 times more return on investment than Chartwell Short. However, Virtus Westchester Credit is 1.35 times less risky than Chartwell Short. It trades about 0.51 of its potential returns per unit of risk. Chartwell Short Duration is currently generating about 0.28 per unit of risk. If you would invest 1,186 in Virtus Westchester Credit on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Virtus Westchester Credit or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Westchester Credit vs. Chartwell Short Duration
Performance |
| Timeline |
| Virtus Westchester Credit |
| Chartwell Short Duration |
Virtus Westchester and Chartwell Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Westchester and Chartwell Short
The main advantage of trading using opposite Virtus Westchester and Chartwell Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Westchester position performs unexpectedly, Chartwell Short 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 Chartwell Short will offset losses from the drop in Chartwell Short's long position.| Virtus Westchester vs. Virtus Multi Strategy Target | Virtus Westchester vs. Virtus Multi Sector Short | Virtus Westchester vs. Ridgeworth Seix High | Virtus Westchester vs. Ridgeworth Innovative Growth |
| Chartwell Short vs. Transamerica Emerging Markets | Chartwell Short vs. Investec Emerging Markets | Chartwell Short vs. Barings Emerging Markets | Chartwell Short vs. Origin Emerging Markets |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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