Correlation Between Virtus Global and Reaves Select
Can any of the company-specific risk be diversified away by investing in both Virtus Global and Reaves Select 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 Reaves Select 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 Reaves Select Research, you can compare the effects of market volatilities on Virtus Global and Reaves Select 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 Reaves Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Global and Reaves Select.
Diversification Opportunities for Virtus Global and Reaves Select
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtus and Reaves is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Global Infrastructure and Reaves Select Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reaves Select Research 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 Reaves Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reaves Select Research has no effect on the direction of Virtus Global i.e., Virtus Global and Reaves Select go up and down completely randomly.
Pair Corralation between Virtus Global and Reaves Select
Assuming the 90 days horizon Virtus Global is expected to generate 2.34 times less return on investment than Reaves Select. But when comparing it to its historical volatility, Virtus Global Infrastructure is 1.49 times less risky than Reaves Select. It trades about 0.14 of its potential returns per unit of risk. Reaves Select Research is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,040 in Reaves Select Research on August 26, 2024 and sell it today you would earn a total of 49.00 from holding Reaves Select Research or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Global Infrastructure vs. Reaves Select Research
Performance |
| Timeline |
| Virtus Global Infras |
| Reaves Select Research |
Virtus Global and Reaves Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Global and Reaves Select
The main advantage of trading using opposite Virtus Global and Reaves Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Global position performs unexpectedly, Reaves Select 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 Reaves Select will offset losses from the drop in Reaves Select'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 |
| Reaves Select vs. Cohen Steers Global | Reaves Select vs. Virtus Global Infrastructure | Reaves Select vs. Brookfield Global Listed | Reaves Select vs. Alpine Global Infrastructure |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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