Correlation Between Virtus Bond and Virtus Global
Can any of the company-specific risk be diversified away by investing in both Virtus Bond and Virtus Global 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 Virtus Global 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 Virtus Global Real, you can compare the effects of market volatilities on Virtus Bond and Virtus Global 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 Virtus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Bond and Virtus Global.
Diversification Opportunities for Virtus Bond and Virtus Global
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and Virtus is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Bond Fund and Virtus Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Global Real 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 Virtus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Global Real has no effect on the direction of Virtus Bond i.e., Virtus Bond and Virtus Global go up and down completely randomly.
Pair Corralation between Virtus Bond and Virtus Global
Assuming the 90 days horizon Virtus Bond is expected to generate 3.96 times less return on investment than Virtus Global. But when comparing it to its historical volatility, Virtus Bond Fund is 2.66 times less risky than Virtus Global. It trades about 0.09 of its potential returns per unit of risk. Virtus Global Real is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,075 in Virtus Global Real on September 3, 2024 and sell it today you would earn a total of 418.00 from holding Virtus Global Real or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Bond Fund vs. Virtus Global Real
Performance |
| Timeline |
| Virtus Bond Fund |
| Virtus Global Real |
Virtus Bond and Virtus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Bond and Virtus Global
The main advantage of trading using opposite Virtus Bond and Virtus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Bond position performs unexpectedly, Virtus Global 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 Global will offset losses from the drop in Virtus Global's long position.| Virtus Bond vs. Metropolitan West Total | Virtus Bond vs. Metropolitan West Total | Virtus Bond vs. Pimco Total Return | Virtus Bond vs. Total Return Fund |
| Virtus Global vs. Virtus Global Real | Virtus Global vs. Virtus Global Real | Virtus Global vs. Virtus Global Real | Virtus Global vs. Real Estate 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |