Correlation Between Virtus Global and Virtus Kar
Can any of the company-specific risk be diversified away by investing in both Virtus Global and Virtus Kar 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 Global and Virtus Kar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Global Infrastructure and Virtus Kar Small Cap, you can compare the effects of market volatilities on Virtus Global and Virtus Kar 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 Global with a short position of Virtus Kar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Global and Virtus Kar.
Diversification Opportunities for Virtus Global and Virtus Kar
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and Virtus is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Global Infrastructure and Virtus Kar Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Kar Small and Virtus Global 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 Global Infrastructure are associated (or correlated) with Virtus Kar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Kar Small has no effect on the direction of Virtus Global i.e., Virtus Global and Virtus Kar go up and down completely randomly.
Pair Corralation between Virtus Global and Virtus Kar
Assuming the 90 days horizon Virtus Global Infrastructure is expected to under-perform the Virtus Kar. But the mutual fund apears to be less risky and, when comparing its historical volatility, Virtus Global Infrastructure is 1.45 times less risky than Virtus Kar. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Virtus Kar Small Cap is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,822 in Virtus Kar Small Cap on October 26, 2024 and sell it today you would earn a total of 51.00 from holding Virtus Kar Small Cap or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Global Infrastructure vs. Virtus Kar Small Cap
Performance |
| Timeline |
| Virtus Global Infras |
| Virtus Kar Small |
Virtus Global and Virtus Kar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Global and Virtus Kar
The main advantage of trading using opposite Virtus Global and Virtus Kar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Global position performs unexpectedly, Virtus Kar 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 Kar will offset losses from the drop in Virtus Kar's long position.| Virtus Global vs. Nuveen Global Infrastructure | Virtus Global vs. Cohen Steers Global | Virtus Global vs. Virtus Global Infrastructure | Virtus Global vs. Virtus Alternatives Diversifier |
| Virtus Kar vs. Virtus Kar Small Cap | Virtus Kar vs. Virtus Kar Mid Cap | Virtus Kar vs. Virtus International Small Cap | Virtus Kar vs. Virtus Kar Small 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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