Correlation Between Virtus Westchester and Virtus Bond
Can any of the company-specific risk be diversified away by investing in both Virtus Westchester and Virtus Bond 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 Virtus Bond 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 Virtus Bond Fund, you can compare the effects of market volatilities on Virtus Westchester and Virtus Bond 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 Virtus Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Westchester and Virtus Bond.
Diversification Opportunities for Virtus Westchester and Virtus Bond
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Virtus and Virtus is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Westchester Credit and Virtus Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Bond Fund 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 Virtus Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Bond Fund has no effect on the direction of Virtus Westchester i.e., Virtus Westchester and Virtus Bond go up and down completely randomly.
Pair Corralation between Virtus Westchester and Virtus Bond
Assuming the 90 days horizon Virtus Westchester Credit is expected to generate 0.29 times more return on investment than Virtus Bond. However, Virtus Westchester Credit is 3.51 times less risky than Virtus Bond. It trades about 0.46 of its potential returns per unit of risk. Virtus Bond Fund is currently generating about -0.02 per unit of risk. If you would invest 1,185 in Virtus Westchester Credit on August 27, 2024 and sell it today you would earn a total of 9.00 from holding Virtus Westchester Credit or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Westchester Credit vs. Virtus Bond Fund
Performance |
| Timeline |
| Virtus Westchester Credit |
| Virtus Bond Fund |
Virtus Westchester and Virtus Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Westchester and Virtus Bond
The main advantage of trading using opposite Virtus Westchester and Virtus Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Westchester position performs unexpectedly, Virtus Bond 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 Virtus Bond will offset losses from the drop in Virtus Bond's long position.| Virtus Westchester vs. Franklin Gold Precious | Virtus Westchester vs. Wells Fargo Advantage | Virtus Westchester vs. Gold And Precious | Virtus Westchester vs. Short Precious Metals |
| Virtus Bond vs. Target Retirement 2040 | Virtus Bond vs. Calvert Moderate Allocation | Virtus Bond vs. Hartford Moderate Allocation | Virtus Bond vs. Moderately Aggressive Balanced |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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