Correlation Between Virtus Real and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Virtus Real and Federated Strategic 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 Real and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Real Estate and Federated Strategic Value, you can compare the effects of market volatilities on Virtus Real and Federated Strategic 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 Real with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Real and Federated Strategic.
Diversification Opportunities for Virtus Real and Federated Strategic
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and Federated is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Real Estate and Federated Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic Value and Virtus Real 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 Real Estate are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic Value has no effect on the direction of Virtus Real i.e., Virtus Real and Federated Strategic go up and down completely randomly.
Pair Corralation between Virtus Real and Federated Strategic
Assuming the 90 days horizon Virtus Real Estate is expected to generate 1.47 times more return on investment than Federated Strategic. However, Virtus Real is 1.47 times more volatile than Federated Strategic Value. It trades about 0.07 of its potential returns per unit of risk. Federated Strategic Value is currently generating about 0.09 per unit of risk. If you would invest 1,687 in Virtus Real Estate on September 2, 2024 and sell it today you would earn a total of 505.00 from holding Virtus Real Estate or generate 29.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Real Estate vs. Federated Strategic Value
Performance |
| Timeline |
| Virtus Real Estate |
| Federated Strategic Value |
Virtus Real and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Real and Federated Strategic
The main advantage of trading using opposite Virtus Real and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Real position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic's long position.| Virtus Real vs. Icon Information Technology | Virtus Real vs. Columbia Global Technology | Virtus Real vs. Biotechnology Ultrasector Profund | Virtus Real vs. Dreyfus Technology Growth |
| Federated Strategic vs. Federated Emerging Market | Federated Strategic vs. Federated Mdt All | Federated Strategic vs. Federated Mdt Balanced | Federated Strategic vs. Federated Global Allocation |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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