Correlation Between Virtus Seix and Mainstay Mackay
Can any of the company-specific risk be diversified away by investing in both Virtus Seix and Mainstay Mackay 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 Seix and Mainstay Mackay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Seix Government and Mainstay Mackay New, you can compare the effects of market volatilities on Virtus Seix and Mainstay Mackay 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 Seix with a short position of Mainstay Mackay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Seix and Mainstay Mackay.
Diversification Opportunities for Virtus Seix and Mainstay Mackay
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virtus and Mainstay is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Seix Government and Mainstay Mackay New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mackay New and Virtus Seix 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 Seix Government are associated (or correlated) with Mainstay Mackay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mackay New has no effect on the direction of Virtus Seix i.e., Virtus Seix and Mainstay Mackay go up and down completely randomly.
Pair Corralation between Virtus Seix and Mainstay Mackay
Assuming the 90 days horizon Virtus Seix Government is expected to generate 0.31 times more return on investment than Mainstay Mackay. However, Virtus Seix Government is 3.25 times less risky than Mainstay Mackay. It trades about 0.18 of its potential returns per unit of risk. Mainstay Mackay New is currently generating about -0.06 per unit of risk. If you would invest 980.00 in Virtus Seix Government on November 15, 2024 and sell it today you would earn a total of 9.00 from holding Virtus Seix Government or generate 0.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Virtus Seix Government vs. Mainstay Mackay New
Performance |
Timeline |
Virtus Seix Government |
Mainstay Mackay New |
Virtus Seix and Mainstay Mackay Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Virtus Seix and Mainstay Mackay
The main advantage of trading using opposite Virtus Seix and Mainstay Mackay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Seix position performs unexpectedly, Mainstay Mackay 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 Mainstay Mackay will offset losses from the drop in Mainstay Mackay's long position.Virtus Seix vs. Virtus Global Real | ||
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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