Correlation Between Virtus Kar and Guggenheim High

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

By analyzing existing cross correlation between Virtus Kar Small Cap and Guggenheim High Yield, you can compare the effects of market volatilities on Virtus Kar and Guggenheim High 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 Kar with a short position of Guggenheim High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Kar and Guggenheim High.

Diversification Opportunities for Virtus Kar and Guggenheim High

0.34

Correlation Coefficient

Virtus Kar  Guggenheim High

Weak diversification

The 3 months correlation between Virtus and Guggenheim is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Kar Small Cap and Guggenheim High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim High Yield and Virtus Kar 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 Kar Small Cap are associated (or correlated) with Guggenheim High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim High Yield has no effect on the direction of Virtus Kar i.e., Virtus Kar and Guggenheim High go up and down completely randomly.

Pair Corralation between Virtus Kar and Guggenheim High

Assuming the 90 days horizon Virtus Kar is expected to generate 2.91 times less return on investment than Guggenheim High. In addition to that, Virtus Kar is 4.96 times more volatile than Guggenheim High Yield. It trades about 0.01 of its total potential returns per unit of risk. Guggenheim High Yield is currently generating about 0.13 per unit of volatility. If you would invest  692.00  in Guggenheim High Yield on October 11, 2024 and sell it today you would earn a total of  120.00  from holding Guggenheim High Yield or generate 17.34% return on investment over 90 days.

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

Virtus Kar Small Cap  vs.  Guggenheim High Yield

Virtus Kar Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Kar Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Guggenheim High Yield

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim High Yield are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Guggenheim High 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 Kar and Guggenheim High

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

The idea behind Virtus Kar Small Cap and Guggenheim High Yield 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.