Correlation Between Virtus AllianzGI and EI Du

Can any of the company-specific risk be diversified away by investing in both Virtus AllianzGI and EI Du 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 AllianzGI and EI Du into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Virtus AllianzGI Convertible and EI du Pont, you can compare the effects of market volatilities on Virtus AllianzGI and EI Du 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 AllianzGI with a short position of EI Du. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus AllianzGI and EI Du.

Diversification Opportunities for Virtus AllianzGI and EI Du

0.43

Correlation Coefficient

Virtus AllianzGI  EI Du

Very weak diversification

The 3 months correlation between Virtus and CTA-P-A is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Virtus AllianzGI Convertible and EI du Pont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EI du Pont and Virtus AllianzGI 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 AllianzGI Convertible are associated (or correlated) with EI Du. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EI du Pont has no effect on the direction of Virtus AllianzGI i.e., Virtus AllianzGI and EI Du go up and down completely randomly.

Pair Corralation between Virtus AllianzGI and EI Du

Assuming the 90 days trading horizon Virtus AllianzGI Convertible is expected to generate 0.34 times more return on investment than EI Du. However, Virtus AllianzGI Convertible is 2.99 times less risky than EI Du. It trades about -0.2 of its potential returns per unit of risk. EI du Pont is currently generating about -0.17 per unit of risk. If you would invest  2,298  in Virtus AllianzGI Convertible on September 30, 2024 and sell it today you would lose (201.00) from holding Virtus AllianzGI Convertible or give up 8.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	67.19%
Values	Daily Returns

Virtus AllianzGI Convertible  vs.  EI du Pont

Virtus AllianzGI Con

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus AllianzGI Convertible has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

EI du Pont

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EI du Pont has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Preferred Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Virtus AllianzGI and EI Du

The main advantage of trading using opposite Virtus AllianzGI and EI Du positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus AllianzGI position performs unexpectedly, EI Du 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 EI Du will offset losses from the drop in EI Du's long position.

The idea behind Virtus AllianzGI Convertible and EI du Pont pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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..