Correlation Between Virtus Rampart and The Merger
Can any of the company-specific risk be diversified away by investing in both Virtus Rampart and The Merger 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 Rampart and The Merger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Rampart Enhanced and The Merger Fund, you can compare the effects of market volatilities on Virtus Rampart and The Merger 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 Rampart with a short position of The Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Rampart and The Merger.
Diversification Opportunities for Virtus Rampart and The Merger
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and The is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Rampart Enhanced and The Merger Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merger Fund and Virtus Rampart 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 Rampart Enhanced are associated (or correlated) with The Merger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merger Fund has no effect on the direction of Virtus Rampart i.e., Virtus Rampart and The Merger go up and down completely randomly.
Pair Corralation between Virtus Rampart and The Merger
Assuming the 90 days horizon Virtus Rampart Enhanced is expected to generate 3.66 times more return on investment than The Merger. However, Virtus Rampart is 3.66 times more volatile than The Merger Fund. It trades about 0.28 of its potential returns per unit of risk. The Merger Fund is currently generating about 0.03 per unit of risk. If you would invest 2,114 in Virtus Rampart Enhanced on September 1, 2024 and sell it today you would earn a total of 89.00 from holding Virtus Rampart Enhanced or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Virtus Rampart Enhanced vs. The Merger Fund
Performance |
| Timeline |
| Virtus Rampart Enhanced |
| Merger Fund |
Virtus Rampart and The Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Rampart and The Merger
The main advantage of trading using opposite Virtus Rampart and The Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Rampart position performs unexpectedly, The Merger 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 The Merger will offset losses from the drop in The Merger's long position.| Virtus Rampart vs. Calvert Moderate Allocation | Virtus Rampart vs. Pro Blend Moderate Term | Virtus Rampart vs. Moderately Aggressive Balanced | Virtus Rampart vs. Transamerica Cleartrack Retirement |
| The Merger vs. Calamos Market Neutral | The Merger vs. Gateway Fund Class | The Merger vs. The Arbitrage Fund | The Merger vs. Neuberger Berman 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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