Correlation Between Virtus Senior and Balanced Strategy
Can any of the company-specific risk be diversified away by investing in both Virtus Senior and Balanced 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 Virtus Senior and Balanced Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Senior Floating and Balanced Strategy Fund, you can compare the effects of market volatilities on Virtus Senior and Balanced 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 Virtus Senior with a short position of Balanced Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Senior and Balanced Strategy.
Diversification Opportunities for Virtus Senior and Balanced Strategy
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Virtus and Balanced is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Senior Floating and Balanced Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Strategy and Virtus Senior 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 Senior Floating are associated (or correlated) with Balanced Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Strategy has no effect on the direction of Virtus Senior i.e., Virtus Senior and Balanced Strategy go up and down completely randomly.
Pair Corralation between Virtus Senior and Balanced Strategy
Assuming the 90 days horizon Virtus Senior is expected to generate 1.24 times less return on investment than Balanced Strategy. But when comparing it to its historical volatility, Virtus Senior Floating is 3.2 times less risky than Balanced Strategy. It trades about 0.21 of its potential returns per unit of risk. Balanced Strategy Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 828.00 in Balanced Strategy Fund on October 9, 2024 and sell it today you would earn a total of 196.00 from holding Balanced Strategy Fund or generate 23.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Senior Floating vs. Balanced Strategy Fund
Performance |
| Timeline |
| Virtus Senior Floating |
| Balanced Strategy |
Virtus Senior and Balanced Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Senior and Balanced Strategy
The main advantage of trading using opposite Virtus Senior and Balanced Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Senior position performs unexpectedly, Balanced 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 Balanced Strategy will offset losses from the drop in Balanced Strategy's long position.| Virtus Senior vs. Virtus Multi Strategy Target | Virtus Senior vs. Virtus Multi Sector Short | Virtus Senior vs. Ridgeworth Seix High | Virtus Senior vs. Ridgeworth Innovative Growth |
| Balanced Strategy vs. Catalystmillburn Hedge Strategy | Balanced Strategy vs. Black Oak Emerging | Balanced Strategy vs. Western Assets Emerging | Balanced Strategy vs. Nasdaq 100 2x Strategy |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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