Correlation Between Tri Continental and Virtus Investment

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

Diversification Opportunities for Tri Continental and Virtus Investment

0.89

Correlation Coefficient

Tri Continental  Virtus Investment

Very poor diversification

The 3 months correlation between Tri and Virtus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Tri Continental Closed and Virtus Investment Partners, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Tri Continental i.e., Tri Continental and Virtus Investment go up and down completely randomly.

Pair Corralation between Tri Continental and Virtus Investment

Allowing for the 90-day total investment horizon Tri Continental is expected to generate 2.85 times less return on investment than Virtus Investment. But when comparing it to its historical volatility, Tri Continental Closed is 3.5 times less risky than Virtus Investment. It trades about 0.19 of its potential returns per unit of risk. Virtus Investment Partners, is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  15,770  in Virtus Investment Partners, on May 5, 2025 and sell it today you would earn a total of  3,196  from holding Virtus Investment Partners, or generate 20.27% return on investment over 90 days.

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

Tri Continental Closed  vs.  Virtus Investment Partners,

Tri Continental Closed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tri Continental Closed are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Tri Continental may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Virtus Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Investment Partners, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Virtus Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tri Continental and Virtus Investment

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

The idea behind Tri Continental Closed and Virtus Investment Partners, 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.