Correlation Between Virtus Investment and Southland Holdings

Can any of the company-specific risk be diversified away by investing in both Virtus Investment and Southland Holdings 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 Southland Holdings 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 Southland Holdings, you can compare the effects of market volatilities on Virtus Investment and Southland Holdings 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 Southland Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Investment and Southland Holdings.

Diversification Opportunities for Virtus Investment and Southland Holdings

-0.27

Correlation Coefficient

Virtus Investment  Southland Holdings

Very good diversification

The 3 months correlation between Virtus and Southland is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners, and Southland Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southland Holdings 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 Southland Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southland Holdings has no effect on the direction of Virtus Investment i.e., Virtus Investment and Southland Holdings go up and down completely randomly.

Pair Corralation between Virtus Investment and Southland Holdings

Given the investment horizon of 90 days Virtus Investment Partners, is expected to under-perform the Southland Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Virtus Investment Partners, is 3.03 times less risky than Southland Holdings. The stock trades about -0.31 of its potential returns per unit of risk. The Southland Holdings is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  364.00  in Southland Holdings on October 26, 2024 and sell it today you would lose (22.00) from holding Southland Holdings or give up 6.04% 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.  Southland Holdings

Virtus Investment

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, Virtus Investment is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Southland Holdings

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Southland Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Southland Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Virtus Investment and Southland Holdings

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

The idea behind Virtus Investment Partners, and Southland Holdings 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.