Correlation Between Virtus AllianzGI and Oaktree Capital

Can any of the company-specific risk be diversified away by investing in both Virtus AllianzGI and Oaktree 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 AllianzGI and Oaktree Capital 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 Oaktree Capital Group, you can compare the effects of market volatilities on Virtus AllianzGI and Oaktree 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 AllianzGI with a short position of Oaktree Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus AllianzGI and Oaktree Capital.

Diversification Opportunities for Virtus AllianzGI and Oaktree Capital

0.83

Correlation Coefficient

Virtus AllianzGI  Oaktree Capital

Very poor diversification

The 3 months correlation between Virtus and Oaktree is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Virtus AllianzGI Convertible and Oaktree Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree Capital Group 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 Oaktree Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree Capital Group has no effect on the direction of Virtus AllianzGI i.e., Virtus AllianzGI and Oaktree Capital go up and down completely randomly.

Pair Corralation between Virtus AllianzGI and Oaktree Capital

Assuming the 90 days trading horizon Virtus AllianzGI Convertible is expected to generate 0.66 times more return on investment than Oaktree Capital. However, Virtus AllianzGI Convertible is 1.52 times less risky than Oaktree Capital. It trades about 0.03 of its potential returns per unit of risk. Oaktree Capital Group is currently generating about 0.0 per unit of risk. If you would invest  2,182  in Virtus AllianzGI Convertible on September 2, 2024 and sell it today you would earn a total of  28.00  from holding Virtus AllianzGI Convertible or generate 1.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Virtus AllianzGI Convertible  vs.  Oaktree Capital Group

Virtus AllianzGI Con

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus AllianzGI Convertible are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Virtus AllianzGI is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oaktree Capital Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oaktree Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking signals, Oaktree Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Virtus AllianzGI and Oaktree Capital

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

The idea behind Virtus AllianzGI Convertible and Oaktree Capital Group 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.