Correlation Between Nasdaq 100 and Virtus Tax-exempt
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Virtus Tax-exempt 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 Nasdaq 100 and Virtus Tax-exempt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Fund Class and Virtus Tax Exempt Bond, you can compare the effects of market volatilities on Nasdaq 100 and Virtus Tax-exempt 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 Nasdaq 100 with a short position of Virtus Tax-exempt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Virtus Tax-exempt.
Diversification Opportunities for Nasdaq 100 and Virtus Tax-exempt
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nasdaq and Virtus is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Fund Class and Virtus Tax Exempt Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Tax Exempt and Nasdaq 100 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 Nasdaq 100 Fund Class are associated (or correlated) with Virtus Tax-exempt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Tax Exempt has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Virtus Tax-exempt go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Virtus Tax-exempt
Assuming the 90 days horizon Nasdaq 100 Fund Class is expected to generate 4.75 times more return on investment than Virtus Tax-exempt. However, Nasdaq 100 is 4.75 times more volatile than Virtus Tax Exempt Bond. It trades about 0.27 of its potential returns per unit of risk. Virtus Tax Exempt Bond is currently generating about 0.24 per unit of risk. If you would invest 7,434 in Nasdaq 100 Fund Class on September 5, 2024 and sell it today you would earn a total of 444.00 from holding Nasdaq 100 Fund Class or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nasdaq 100 Fund Class vs. Virtus Tax Exempt Bond
Performance |
| Timeline |
| Nasdaq 100 Fund |
| Virtus Tax Exempt |
Nasdaq 100 and Virtus Tax-exempt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Virtus Tax-exempt
The main advantage of trading using opposite Nasdaq 100 and Virtus Tax-exempt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Virtus Tax-exempt 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 Tax-exempt will offset losses from the drop in Virtus Tax-exempt's long position.| Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 2x Strategy | Nasdaq 100 vs. Dow 2x Strategy |
| Virtus Tax-exempt vs. Nasdaq 100 Fund Class | Virtus Tax-exempt vs. Qs Growth Fund | Virtus Tax-exempt vs. T Rowe Price | Virtus Tax-exempt vs. Growth Strategy Fund |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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