Correlation Between Amer Beacon and Virtus High
Can any of the company-specific risk be diversified away by investing in both Amer Beacon and Virtus High 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 Amer Beacon and Virtus High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amer Beacon Ark and Virtus High Yield, you can compare the effects of market volatilities on Amer Beacon and Virtus High 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 Amer Beacon with a short position of Virtus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amer Beacon and Virtus High.
Diversification Opportunities for Amer Beacon and Virtus High
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amer and Virtus is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Amer Beacon Ark and Virtus High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus High Yield and Amer Beacon 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 Amer Beacon Ark are associated (or correlated) with Virtus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus High Yield has no effect on the direction of Amer Beacon i.e., Amer Beacon and Virtus High go up and down completely randomly.
Pair Corralation between Amer Beacon and Virtus High
Assuming the 90 days horizon Amer Beacon Ark is expected to generate 8.33 times more return on investment than Virtus High. However, Amer Beacon is 8.33 times more volatile than Virtus High Yield. It trades about 0.08 of its potential returns per unit of risk. Virtus High Yield is currently generating about 0.21 per unit of risk. If you would invest 1,045 in Amer Beacon Ark on October 27, 2024 and sell it today you would earn a total of 657.00 from holding Amer Beacon Ark or generate 62.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Amer Beacon Ark vs. Virtus High Yield
Performance |
Timeline |
Amer Beacon Ark |
Virtus High Yield |
Amer Beacon and Virtus High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amer Beacon and Virtus High
The main advantage of trading using opposite Amer Beacon and Virtus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amer Beacon position performs unexpectedly, Virtus High 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 High will offset losses from the drop in Virtus High's long position.Amer Beacon vs. Franklin Emerging Market | Amer Beacon vs. Lord Abbett Diversified | Amer Beacon vs. Saat Market Growth | Amer Beacon vs. Western Asset Diversified |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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