Correlation Between Virtus AllianzGI and HYB

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

Diversification Opportunities for Virtus AllianzGI and HYB

0.2

Correlation Coefficient

Virtus AllianzGI  HYB

Modest diversification

The 3 months correlation between Virtus and HYB is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Virtus AllianzGI Convertible and HYB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYB 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 HYB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYB has no effect on the direction of Virtus AllianzGI i.e., Virtus AllianzGI and HYB go up and down completely randomly.

Pair Corralation between Virtus AllianzGI and HYB

Assuming the 90 days trading horizon Virtus AllianzGI Convertible is expected to generate 1.4 times more return on investment than HYB. However, Virtus AllianzGI is 1.4 times more volatile than HYB. It trades about 0.23 of its potential returns per unit of risk. HYB is currently generating about 0.08 per unit of risk. If you would invest  2,064  in Virtus AllianzGI Convertible on December 27, 2024 and sell it today you would earn a total of  133.00  from holding Virtus AllianzGI Convertible or generate 6.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	63.93%
Values	Daily Returns

Virtus AllianzGI Convertible  vs.  HYB

Virtus AllianzGI Con

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus AllianzGI Convertible are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Virtus AllianzGI may actually be approaching a critical reversion point that can send shares even higher in April 2025.

HYB

Risk-Adjusted Performance

Modest

Over the last 90 days HYB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HYB 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 HYB

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

The idea behind Virtus AllianzGI Convertible and HYB 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..