Correlation Between Virtus Bond and Virtus Dfa
Can any of the company-specific risk be diversified away by investing in both Virtus Bond and Virtus Dfa 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 Dfa 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 Dfa 2040, you can compare the effects of market volatilities on Virtus Bond and Virtus Dfa 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 Dfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Bond and Virtus Dfa.
Diversification Opportunities for Virtus Bond and Virtus Dfa
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virtus and Virtus is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Bond Fund and Virtus Dfa 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Dfa 2040 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 Dfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Dfa 2040 has no effect on the direction of Virtus Bond i.e., Virtus Bond and Virtus Dfa go up and down completely randomly.
Pair Corralation between Virtus Bond and Virtus Dfa
Assuming the 90 days horizon Virtus Bond is expected to generate 2.22 times less return on investment than Virtus Dfa. But when comparing it to its historical volatility, Virtus Bond Fund is 1.83 times less risky than Virtus Dfa. It trades about 0.11 of its potential returns per unit of risk. Virtus Dfa 2040 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,092 in Virtus Dfa 2040 on September 3, 2024 and sell it today you would earn a total of 124.00 from holding Virtus Dfa 2040 or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Bond Fund vs. Virtus Dfa 2040
Performance |
| Timeline |
| Virtus Bond Fund |
| Virtus Dfa 2040 |
Virtus Bond and Virtus Dfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Bond and Virtus Dfa
The main advantage of trading using opposite Virtus Bond and Virtus Dfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Bond position performs unexpectedly, Virtus Dfa 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 Dfa will offset losses from the drop in Virtus Dfa'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 Dfa vs. American Funds American | Virtus Dfa vs. American Funds American | Virtus Dfa vs. American Balanced | Virtus Dfa vs. American Balanced 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |