Correlation Between Virtus Investment and Portman Ridge

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

By analyzing existing cross correlation between Virtus Investment Partners, and Portman Ridge Finance, you can compare the effects of market volatilities on Virtus Investment and Portman Ridge 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 Investment with a short position of Portman Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Investment and Portman Ridge.

Diversification Opportunities for Virtus Investment and Portman Ridge

-0.03

Correlation Coefficient

Virtus Investment  Portman Ridge

Good diversification

The 3 months correlation between Virtus and Portman is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners, and Portman Ridge Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portman Ridge Finance and Virtus Investment 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 Investment Partners, are associated (or correlated) with Portman Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portman Ridge Finance has no effect on the direction of Virtus Investment i.e., Virtus Investment and Portman Ridge go up and down completely randomly.

Pair Corralation between Virtus Investment and Portman Ridge

Given the investment horizon of 90 days Virtus Investment Partners, is expected to under-perform the Portman Ridge. In addition to that, Virtus Investment is 1.35 times more volatile than Portman Ridge Finance. It trades about -0.21 of its total potential returns per unit of risk. Portman Ridge Finance is currently generating about -0.1 per unit of volatility. If you would invest  1,571  in Portman Ridge Finance on December 29, 2024 and sell it today you would lose (126.00) from holding Portman Ridge Finance or give up 8.02% of portfolio value over 90 days.

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

Virtus Investment Partners,  vs.  Portman Ridge Finance

Virtus Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus Investment Partners, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Portman Ridge Finance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Portman Ridge Finance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Virtus Investment and Portman Ridge

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

The idea behind Virtus Investment Partners, and Portman Ridge Finance 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.