Correlation Between Virtus High and Virtus Multi
Can any of the company-specific risk be diversified away by investing in both Virtus High and Virtus Multi 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 High and Virtus Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus High Yield and Virtus Multi Strategy Target, you can compare the effects of market volatilities on Virtus High and Virtus Multi 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 High with a short position of Virtus Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus High and Virtus Multi.
Diversification Opportunities for Virtus High and Virtus Multi
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Virtus and Virtus is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Virtus High Yield 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 Virtus High 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 High Yield are associated (or correlated) with Virtus Multi. 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 Virtus High i.e., Virtus High and Virtus Multi go up and down completely randomly.
Pair Corralation between Virtus High and Virtus Multi
Assuming the 90 days horizon Virtus High is expected to generate 2.31 times less return on investment than Virtus Multi. But when comparing it to its historical volatility, Virtus High Yield is 1.32 times less risky than Virtus Multi. It trades about 0.22 of its potential returns per unit of risk. Virtus Multi Strategy Target is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1,805 in Virtus Multi Strategy Target on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Virtus Multi Strategy Target or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus High Yield vs. Virtus Multi Strategy Target
Performance |
| Timeline |
| Virtus High Yield |
| Virtus Multi Strategy |
Virtus High and Virtus Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus High and Virtus Multi
The main advantage of trading using opposite Virtus High and Virtus Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus High position performs unexpectedly, Virtus Multi 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 will offset losses from the drop in Virtus Multi's long position.| Virtus High vs. Ab Small Cap | Virtus High vs. Sp Smallcap 600 | Virtus High vs. Kinetics Small Cap | Virtus High vs. Siit Small Mid |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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