Correlation Between Virtus Convertible and Wcm Focused

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

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

Diversification Opportunities for Virtus Convertible and Wcm Focused

0.71

Correlation Coefficient

Virtus Convertible  Wcm Focused

Poor diversification

The 3 months correlation between Virtus and WCM is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Convertible and Wcm Focused International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wcm Focused International and Virtus Convertible 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 Convertible are associated (or correlated) with Wcm Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wcm Focused International has no effect on the direction of Virtus Convertible i.e., Virtus Convertible and Wcm Focused go up and down completely randomly.

Pair Corralation between Virtus Convertible and Wcm Focused

Assuming the 90 days horizon Virtus Convertible is expected to generate 0.77 times more return on investment than Wcm Focused. However, Virtus Convertible is 1.3 times less risky than Wcm Focused. It trades about 0.67 of its potential returns per unit of risk. Wcm Focused International is currently generating about 0.31 per unit of risk. If you would invest  3,431  in Virtus Convertible on September 4, 2024 and sell it today you would earn a total of  291.00  from holding Virtus Convertible or generate 8.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Virtus Convertible  vs.  Wcm Focused International

Virtus Convertible

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Convertible are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Virtus Convertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Wcm Focused International

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wcm Focused International are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Wcm Focused is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Virtus Convertible and Wcm Focused

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

The idea behind Virtus Convertible and Wcm Focused International 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.