Correlation Between Virtus Emerging and Virtus Multi-sector
Can any of the company-specific risk be diversified away by investing in both Virtus Emerging and Virtus Multi-sector 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 Virtus Multi-sector 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 Virtus Multi Sector Short, you can compare the effects of market volatilities on Virtus Emerging and Virtus Multi-sector 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 Virtus Multi-sector. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Emerging and Virtus Multi-sector.
Diversification Opportunities for Virtus Emerging and Virtus Multi-sector
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virtus and Virtus is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Emerging Markets and Virtus Multi Sector Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Multi Sector 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 Virtus Multi-sector. 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 Sector has no effect on the direction of Virtus Emerging i.e., Virtus Emerging and Virtus Multi-sector go up and down completely randomly.
Pair Corralation between Virtus Emerging and Virtus Multi-sector
Assuming the 90 days horizon Virtus Emerging Markets is expected to generate 5.33 times more return on investment than Virtus Multi-sector. However, Virtus Emerging is 5.33 times more volatile than Virtus Multi Sector Short. It trades about 0.11 of its potential returns per unit of risk. Virtus Multi Sector Short is currently generating about 0.08 per unit of risk. If you would invest 712.00 in Virtus Emerging Markets on November 3, 2024 and sell it today you would earn a total of 11.00 from holding Virtus Emerging Markets or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Emerging Markets vs. Virtus Multi Sector Short
Performance |
| Timeline |
| Virtus Emerging Markets |
| Virtus Multi Sector |
Virtus Emerging and Virtus Multi-sector Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Emerging and Virtus Multi-sector
The main advantage of trading using opposite Virtus Emerging and Virtus Multi-sector positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Emerging position performs unexpectedly, Virtus Multi-sector 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-sector will offset losses from the drop in Virtus Multi-sector's 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 |
| Virtus Multi-sector vs. Arrow Managed Futures | Virtus Multi-sector vs. Cref Inflation Linked Bond | Virtus Multi-sector vs. Atac Inflation Rotation | Virtus Multi-sector vs. Tiaa Cref Inflation Link |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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