Correlation Between Stocksplus Total and Virtus Kar
Can any of the company-specific risk be diversified away by investing in both Stocksplus Total 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 Stocksplus Total and Virtus Kar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stocksplus Total Return and Virtus Kar Small Cap, you can compare the effects of market volatilities on Stocksplus Total 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 Stocksplus Total with a short position of Virtus Kar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stocksplus Total and Virtus Kar.
Diversification Opportunities for Stocksplus Total and Virtus Kar
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stocksplus and Virtus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Stocksplus Total Return 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 Stocksplus Total 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 Stocksplus Total Return 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 Stocksplus Total i.e., Stocksplus Total and Virtus Kar go up and down completely randomly.
Pair Corralation between Stocksplus Total and Virtus Kar
Assuming the 90 days horizon Stocksplus Total is expected to generate 2.63 times less return on investment than Virtus Kar. But when comparing it to its historical volatility, Stocksplus Total Return is 1.25 times less risky than Virtus Kar. It trades about 0.01 of its potential returns per unit of risk. Virtus Kar Small Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,776 in Virtus Kar Small Cap on October 25, 2024 and sell it today you would earn a total of 114.00 from holding Virtus Kar Small Cap or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.33% |
| Values | Daily Returns |
Stocksplus Total Return vs. Virtus Kar Small Cap
Performance |
| Timeline |
| Stocksplus Total Return |
| Virtus Kar Small |
Stocksplus Total and Virtus Kar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stocksplus Total and Virtus Kar
The main advantage of trading using opposite Stocksplus Total and Virtus Kar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stocksplus Total 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.| Stocksplus Total vs. Pimco Small Cap | Stocksplus Total vs. Pimco International Stocksplus | Stocksplus Total vs. Fundamental Indexplus Tr | Stocksplus Total vs. Stocksplus Fund Institutional |
| Virtus Kar vs. Pimco International Stocksplus | Virtus Kar vs. Fundamental Indexplus Tr | Virtus Kar vs. Stocksplus Total Return | Virtus Kar vs. Pimco Stocksplus Long |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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