Correlation Between City National and Virtus Multi
Can any of the company-specific risk be diversified away by investing in both City National and Virtus Multi 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 City National and Virtus Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Virtus Multi Strategy Target, you can compare the effects of market volatilities on City National and Virtus Multi 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 City National with a short position of Virtus Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Virtus Multi.
Diversification Opportunities for City National and Virtus Multi
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between City and Virtus is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale 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 City National 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 City National Rochdale are associated (or correlated) with Virtus Multi. 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 City National i.e., City National and Virtus Multi go up and down completely randomly.
Pair Corralation between City National and Virtus Multi
Assuming the 90 days horizon City National is expected to generate 12.57 times less return on investment than Virtus Multi. But when comparing it to its historical volatility, City National Rochdale is 1.47 times less risky than Virtus Multi. It trades about 0.04 of its potential returns per unit of risk. Virtus Multi Strategy Target is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1,805 in Virtus Multi Strategy Target on September 13, 2024 and sell it today you would earn a total of 22.00 from holding Virtus Multi Strategy Target or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
City National Rochdale vs. Virtus Multi Strategy Target
Performance |
| Timeline |
| City National Rochdale |
| Virtus Multi Strategy |
City National and Virtus Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Virtus Multi
The main advantage of trading using opposite City National and Virtus Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Virtus Multi 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 will offset losses from the drop in Virtus Multi's long position.| City National vs. Columbia Global Technology | City National vs. Vanguard Information Technology | City National vs. Icon Information Technology | City National vs. Science Technology Fund |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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