Correlation Between Virtus Newfleet and Highland Capital

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

By analyzing existing cross correlation between Virtus Newfleet Multi Sector and Highland Capital Management, you can compare the effects of market volatilities on Virtus Newfleet and Highland Capital 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 Newfleet with a short position of Highland Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Newfleet and Highland Capital.

Diversification Opportunities for Virtus Newfleet and Highland Capital

0.0

Correlation Coefficient

Virtus Newfleet  Highland Capital

Pay attention - limited upside

The 3 months correlation between Virtus and Highland is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Newfleet Multi Sector and Highland Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Capital Man and Virtus Newfleet 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 Newfleet Multi Sector are associated (or correlated) with Highland Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Capital Man has no effect on the direction of Virtus Newfleet i.e., Virtus Newfleet and Highland Capital go up and down completely randomly.

Pair Corralation between Virtus Newfleet and Highland Capital

If you would invest  2,275  in Virtus Newfleet Multi Sector on September 12, 2024 and sell it today you would earn a total of  4.00  from holding Virtus Newfleet Multi Sector or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	3.13%
Values	Daily Returns

Virtus Newfleet Multi Sector  vs.  Highland Capital Management

Virtus Newfleet Multi

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Virtus Newfleet Multi Sector has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Virtus Newfleet is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Highland Capital Man

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Virtus Newfleet and Highland Capital

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

The idea behind Virtus Newfleet Multi Sector and Highland Capital Management 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.