Correlation Between Virtus Bond and The Merger
Can any of the company-specific risk be diversified away by investing in both Virtus Bond 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 Bond 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 Bond Fund and The Merger Fund, you can compare the effects of market volatilities on Virtus Bond 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 Bond with a short position of The Merger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Bond and The Merger.
Diversification Opportunities for Virtus Bond and The Merger
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virtus and The is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Bond Fund 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 Bond 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 Bond Fund 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 Bond i.e., Virtus Bond and The Merger go up and down completely randomly.
Pair Corralation between Virtus Bond and The Merger
Assuming the 90 days horizon Virtus Bond Fund is expected to generate 2.1 times more return on investment than The Merger. However, Virtus Bond is 2.1 times more volatile than The Merger Fund. It trades about 0.09 of its potential returns per unit of risk. The Merger Fund is currently generating about 0.09 per unit of risk. If you would invest 958.00 in Virtus Bond Fund on August 29, 2024 and sell it today you would earn a total of 68.00 from holding Virtus Bond Fund or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Bond Fund vs. The Merger Fund
Performance |
| Timeline |
| Virtus Bond Fund |
| Merger Fund |
Virtus Bond and The Merger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Bond and The Merger
The main advantage of trading using opposite Virtus Bond and The Merger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Bond 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 Bond vs. Virtus Multi Strategy Target | Virtus Bond vs. Virtus Multi Sector Short | Virtus Bond vs. Ridgeworth Seix High | Virtus Bond vs. Ridgeworth Innovative Growth |
| The Merger vs. Strategic Advisers International | The Merger vs. Strategic Advisers Income | The Merger vs. Aquagold International | The Merger vs. Morningstar Unconstrained Allocation |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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