Correlation Between Tri Continental and Virtus Allianzgi

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

By analyzing existing cross correlation between Tri Continental Closed and Virtus Allianzgi Artificial, you can compare the effects of market volatilities on Tri Continental and Virtus Allianzgi 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 Tri Continental with a short position of Virtus Allianzgi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tri Continental and Virtus Allianzgi.

Diversification Opportunities for Tri Continental and Virtus Allianzgi

0.87

Correlation Coefficient

Tri Continental  Virtus Allianzgi

Very poor diversification

The 3 months correlation between Tri and Virtus is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Tri Continental Closed and Virtus Allianzgi Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Allianzgi Art and Tri Continental 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 Tri Continental Closed are associated (or correlated) with Virtus Allianzgi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Allianzgi Art has no effect on the direction of Tri Continental i.e., Tri Continental and Virtus Allianzgi go up and down completely randomly.

Pair Corralation between Tri Continental and Virtus Allianzgi

Allowing for the 90-day total investment horizon Tri Continental Closed is expected to generate 0.43 times more return on investment than Virtus Allianzgi. However, Tri Continental Closed is 2.3 times less risky than Virtus Allianzgi. It trades about -0.04 of its potential returns per unit of risk. Virtus Allianzgi Artificial is currently generating about -0.12 per unit of risk. If you would invest  3,175  in Tri Continental Closed on December 26, 2024 and sell it today you would lose (62.00) from holding Tri Continental Closed or give up 1.95% of portfolio value over 90 days.

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

Tri Continental Closed  vs.  Virtus Allianzgi Artificial

Tri Continental Closed

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tri Continental Closed has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Tri Continental is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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.

Pair Trading with Tri Continental and Virtus Allianzgi

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

The idea behind Tri Continental Closed and Virtus Allianzgi Artificial 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.