Correlation Between Equity Growth and Virtus Westchester
Can any of the company-specific risk be diversified away by investing in both Equity Growth and Virtus Westchester 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 Equity Growth and Virtus Westchester into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Growth Fund and Virtus Westchester Credit, you can compare the effects of market volatilities on Equity Growth and Virtus Westchester 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 Equity Growth with a short position of Virtus Westchester. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Growth and Virtus Westchester.
Diversification Opportunities for Equity Growth and Virtus Westchester
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Equity and Virtus is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Equity Growth Fund and Virtus Westchester Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Westchester Credit and Equity Growth 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 Equity Growth Fund are associated (or correlated) with Virtus Westchester. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Westchester Credit has no effect on the direction of Equity Growth i.e., Equity Growth and Virtus Westchester go up and down completely randomly.
Pair Corralation between Equity Growth and Virtus Westchester
Assuming the 90 days horizon Equity Growth Fund is expected to generate 7.76 times more return on investment than Virtus Westchester. However, Equity Growth is 7.76 times more volatile than Virtus Westchester Credit. It trades about 0.09 of its potential returns per unit of risk. Virtus Westchester Credit is currently generating about 0.39 per unit of risk. If you would invest 3,432 in Equity Growth Fund on September 14, 2024 and sell it today you would earn a total of 43.00 from holding Equity Growth Fund or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Growth Fund vs. Virtus Westchester Credit
Performance |
| Timeline |
| Equity Growth |
| Virtus Westchester Credit |
Equity Growth and Virtus Westchester Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Growth and Virtus Westchester
The main advantage of trading using opposite Equity Growth and Virtus Westchester positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Growth position performs unexpectedly, Virtus Westchester 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 Westchester will offset losses from the drop in Virtus Westchester's long position.| Equity Growth vs. Mid Cap Value | Equity Growth vs. Income Growth Fund | Equity Growth vs. Diversified Bond Fund | Equity Growth vs. Emerging Markets Fund |
| Virtus Westchester vs. Washington Mutual Investors | Virtus Westchester vs. Fisher Large Cap | Virtus Westchester vs. Qs Large Cap | Virtus Westchester vs. Guidemark Large Cap |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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