Correlation Between Virtus AllianzGI and Nuveen Variable

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

Diversification Opportunities for Virtus AllianzGI and Nuveen Variable

-0.2

Correlation Coefficient

Virtus AllianzGI  Nuveen Variable

Good diversification

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

Pair Corralation between Virtus AllianzGI and Nuveen Variable

Assuming the 90 days trading horizon Virtus AllianzGI is expected to generate 8.9 times less return on investment than Nuveen Variable. In addition to that, Virtus AllianzGI is 1.07 times more volatile than Nuveen Variable Rate. It trades about 0.01 of its total potential returns per unit of risk. Nuveen Variable Rate is currently generating about 0.09 per unit of volatility. If you would invest  1,758  in Nuveen Variable Rate on October 22, 2024 and sell it today you would earn a total of  112.00  from holding Nuveen Variable Rate or generate 6.37% return on investment over 90 days.

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

Virtus AllianzGI Convertible  vs.  Nuveen Variable Rate

Virtus AllianzGI Con

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus AllianzGI Convertible has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Nuveen Variable Rate

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Variable Rate are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Nuveen Variable is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Virtus AllianzGI and Nuveen Variable

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

The idea behind Virtus AllianzGI Convertible and Nuveen Variable Rate 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.