Correlation Between American Beacon and Virtus Multi-strategy
Can any of the company-specific risk be diversified away by investing in both American Beacon and Virtus Multi-strategy 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 American Beacon and Virtus Multi-strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon The and Virtus Multi Strategy Target, you can compare the effects of market volatilities on American Beacon and Virtus Multi-strategy 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 American Beacon with a short position of Virtus Multi-strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Virtus Multi-strategy.
Diversification Opportunities for American Beacon and Virtus Multi-strategy
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Virtus is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon The and Virtus Multi Strategy Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Multi Strategy and American Beacon 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 American Beacon The are associated (or correlated) with Virtus Multi-strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Multi Strategy has no effect on the direction of American Beacon i.e., American Beacon and Virtus Multi-strategy go up and down completely randomly.
Pair Corralation between American Beacon and Virtus Multi-strategy
Assuming the 90 days horizon American Beacon The is expected to under-perform the Virtus Multi-strategy. In addition to that, American Beacon is 10.92 times more volatile than Virtus Multi Strategy Target. It trades about -0.37 of its total potential returns per unit of risk. Virtus Multi Strategy Target is currently generating about -0.41 per unit of volatility. If you would invest 1,829 in Virtus Multi Strategy Target on October 9, 2024 and sell it today you would lose (29.00) from holding Virtus Multi Strategy Target or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon The vs. Virtus Multi Strategy Target
Performance |
| Timeline |
| American Beacon |
| Virtus Multi Strategy |
American Beacon and Virtus Multi-strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Virtus Multi-strategy
The main advantage of trading using opposite American Beacon and Virtus Multi-strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Virtus Multi-strategy 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 Multi-strategy will offset losses from the drop in Virtus Multi-strategy's long position.| American Beacon vs. American Beacon Ssi | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Twentyfour |
| Virtus Multi-strategy vs. T Rowe Price | Virtus Multi-strategy vs. Scharf Fund Retail | Virtus Multi-strategy vs. Qs Global Equity | Virtus Multi-strategy vs. Gmo Global Equity |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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