Correlation Between Virtus Convertible and Sierra Core

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

By analyzing existing cross correlation between Virtus Convertible and Sierra E Retirement, you can compare the effects of market volatilities on Virtus Convertible and Sierra Core 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 Convertible with a short position of Sierra Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Convertible and Sierra Core.

Diversification Opportunities for Virtus Convertible and Sierra Core

0.62

Correlation Coefficient

Virtus Convertible  Sierra Core

Poor diversification

The 3 months correlation between Virtus and Sierra is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Convertible and Sierra E Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sierra E Retirement and Virtus Convertible 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 Convertible are associated (or correlated) with Sierra Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sierra E Retirement has no effect on the direction of Virtus Convertible i.e., Virtus Convertible and Sierra Core go up and down completely randomly.

Pair Corralation between Virtus Convertible and Sierra Core

If you would invest  2,982  in Virtus Convertible on October 26, 2024 and sell it today you would earn a total of  683.00  from holding Virtus Convertible or generate 22.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.0%
Values	Daily Returns

Virtus Convertible  vs.  Sierra E Retirement

Virtus Convertible

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Convertible are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Virtus Convertible may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Sierra E Retirement

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Sierra E Retirement has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Sierra Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Virtus Convertible and Sierra Core

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

The idea behind Virtus Convertible and Sierra E Retirement 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.