Correlation Between James Alpha and Virtus Global
Can any of the company-specific risk be diversified away by investing in both James Alpha and Virtus Global 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 James Alpha and Virtus Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Alpha Global and Virtus Global Real, you can compare the effects of market volatilities on James Alpha and Virtus Global 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 James Alpha with a short position of Virtus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Alpha and Virtus Global.
Diversification Opportunities for James Alpha and Virtus Global
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between James and Virtus is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding James Alpha Global and Virtus Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Global Real and James Alpha 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 James Alpha Global are associated (or correlated) with Virtus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Global Real has no effect on the direction of James Alpha i.e., James Alpha and Virtus Global go up and down completely randomly.
Pair Corralation between James Alpha and Virtus Global
Assuming the 90 days horizon James Alpha is expected to generate 2.38 times less return on investment than Virtus Global. But when comparing it to its historical volatility, James Alpha Global is 1.06 times less risky than Virtus Global. It trades about 0.1 of its potential returns per unit of risk. Virtus Global Real is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,370 in Virtus Global Real on September 2, 2024 and sell it today you would earn a total of 123.00 from holding Virtus Global Real or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
James Alpha Global vs. Virtus Global Real
Performance |
| Timeline |
| James Alpha Global |
| Virtus Global Real |
James Alpha and Virtus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with James Alpha and Virtus Global
The main advantage of trading using opposite James Alpha and Virtus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Alpha position performs unexpectedly, Virtus Global 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 Global will offset losses from the drop in Virtus Global's long position.The idea behind James Alpha Global and Virtus Global Real 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.| Virtus Global vs. Virtus Global Real | Virtus Global vs. Virtus Global Real | Virtus Global vs. Real Estate Fund | Virtus Global vs. Virtus Kar Mid 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |