Correlation Between Virtus Allianzgi and General American

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

By analyzing existing cross correlation between Virtus Allianzgi Artificial and General American Investors, you can compare the effects of market volatilities on Virtus Allianzgi and General American 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 General American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Allianzgi and General American.

Diversification Opportunities for Virtus Allianzgi and General American

0.79

Correlation Coefficient

Virtus Allianzgi  General American

Poor diversification

The 3 months correlation between Virtus and General is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Allianzgi Artificial and General American Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General American Inv 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 Artificial are associated (or correlated) with General American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General American Inv has no effect on the direction of Virtus Allianzgi i.e., Virtus Allianzgi and General American go up and down completely randomly.

Pair Corralation between Virtus Allianzgi and General American

Considering the 90-day investment horizon Virtus Allianzgi Artificial is expected to under-perform the General American. In addition to that, Virtus Allianzgi is 2.61 times more volatile than General American Investors. It trades about -0.13 of its total potential returns per unit of risk. General American Investors is currently generating about -0.02 per unit of volatility. If you would invest  5,101  in General American Investors on December 28, 2024 and sell it today you would lose (45.00) from holding General American Investors or give up 0.88% of portfolio value over 90 days.

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

Virtus Allianzgi Artificial  vs.  General American Investors

Virtus Allianzgi Art

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus Allianzgi Artificial has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the fund investors.

General American Inv

Risk-Adjusted Performance

Very Weak

Over the last 90 days General American Investors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, General American is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Virtus Allianzgi and General American

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

The idea behind Virtus Allianzgi Artificial and General American Investors 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.