Correlation Between Nationwide Bond and Virtus Multi-strategy
Can any of the company-specific risk be diversified away by investing in both Nationwide Bond 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 Nationwide Bond 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 Nationwide Bond Fund and Virtus Multi Strategy Target, you can compare the effects of market volatilities on Nationwide Bond 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 Nationwide Bond with a short position of Virtus Multi-strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Bond and Virtus Multi-strategy.
Diversification Opportunities for Nationwide Bond and Virtus Multi-strategy
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nationwide and Virtus is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Bond Fund 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 Nationwide Bond 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 Nationwide Bond Fund 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 Nationwide Bond i.e., Nationwide Bond and Virtus Multi-strategy go up and down completely randomly.
Pair Corralation between Nationwide Bond and Virtus Multi-strategy
Assuming the 90 days horizon Nationwide Bond is expected to generate 2.47 times less return on investment than Virtus Multi-strategy. In addition to that, Nationwide Bond is 1.59 times more volatile than Virtus Multi Strategy Target. It trades about 0.03 of its total potential returns per unit of risk. Virtus Multi Strategy Target is currently generating about 0.12 per unit of volatility. If you would invest 1,564 in Virtus Multi Strategy Target on November 2, 2024 and sell it today you would earn a total of 251.00 from holding Virtus Multi Strategy Target or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Nationwide Bond Fund vs. Virtus Multi Strategy Target
Performance |
| Timeline |
| Nationwide Bond |
| Virtus Multi Strategy |
Nationwide Bond and Virtus Multi-strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Bond and Virtus Multi-strategy
The main advantage of trading using opposite Nationwide Bond and Virtus Multi-strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Bond 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.| Nationwide Bond vs. Ab Global Bond | Nationwide Bond vs. Qs Large Cap | Nationwide Bond vs. Pnc Balanced Allocation | Nationwide Bond vs. L Abbett Growth |
| Virtus Multi-strategy vs. The Growth Equity | Virtus Multi-strategy vs. Artisan Select Equity | Virtus Multi-strategy vs. Aqr Long Short Equity | Virtus Multi-strategy vs. Doubleline Core Fixed |
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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