Correlation Between American Funds and Virtus Multi-strategy
Can any of the company-specific risk be diversified away by investing in both American Funds and Virtus Multi-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 American Funds and Virtus Multi-strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2055 and Virtus Multi Strategy Target, you can compare the effects of market volatilities on American Funds and Virtus Multi-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 American Funds with a short position of Virtus Multi-strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Virtus Multi-strategy.
Diversification Opportunities for American Funds and Virtus Multi-strategy
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between American and Virtus is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2055 and Virtus Multi Strategy Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Multi Strategy and American Funds 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 American Funds 2055 are associated (or correlated) with Virtus Multi-strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Multi Strategy has no effect on the direction of American Funds i.e., American Funds and Virtus Multi-strategy go up and down completely randomly.
Pair Corralation between American Funds and Virtus Multi-strategy
If you would invest 0.00 in American Funds 2055 on October 9, 2024 and sell it today you would earn a total of 0.00 from holding American Funds 2055 or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 2.56% |
| Values | Daily Returns |
American Funds 2055 vs. Virtus Multi Strategy Target
Performance |
| Timeline |
| American Funds 2055 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Virtus Multi Strategy |
American Funds and Virtus Multi-strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Virtus Multi-strategy
The main advantage of trading using opposite American Funds and Virtus Multi-strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Virtus Multi-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 Virtus Multi-strategy will offset losses from the drop in Virtus Multi-strategy's long position.| American Funds vs. Vest Large Cap | American Funds vs. Fisher Large Cap | American Funds vs. Americafirst Large Cap | American Funds vs. Fidelity Large Cap |
| Virtus Multi-strategy vs. Bbh Intermediate Municipal | Virtus Multi-strategy vs. Enhanced Fixed Income | Virtus Multi-strategy vs. T Rowe Price | Virtus Multi-strategy vs. Alliancebernstein Bond |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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