Correlation Between Virtus Emerging and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Virtus Emerging and Dow Jones 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 Emerging and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Emerging Markets and Dow Jones Industrial, you can compare the effects of market volatilities on Virtus Emerging and Dow Jones 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 Emerging with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Emerging and Dow Jones.
Diversification Opportunities for Virtus Emerging and Dow Jones
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Virtus and Dow is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Emerging Markets and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Virtus Emerging 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 Emerging Markets are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Virtus Emerging i.e., Virtus Emerging and Dow Jones go up and down completely randomly.
Pair Corralation between Virtus Emerging and Dow Jones
Assuming the 90 days horizon Virtus Emerging Markets is expected to under-perform the Dow Jones. But the mutual fund apears to be less risky and, when comparing its historical volatility, Virtus Emerging Markets is 1.21 times less risky than Dow Jones. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 233,449 from holding Dow Jones Industrial or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Emerging Markets vs. Dow Jones Industrial
Performance |
| Timeline |
Virtus Emerging and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Virtus Emerging Markets
Pair trading matchups for Virtus Emerging
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Virtus Emerging and Dow Jones
The main advantage of trading using opposite Virtus Emerging and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Emerging position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Virtus Emerging vs. Metropolitan West Total | Virtus Emerging vs. Janus Flexible Bond | Virtus Emerging vs. Eaton Vance Income | Virtus Emerging vs. Mfs Emerging Markets |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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