Correlation Between Virtus Seix and Federated Equity
Can any of the company-specific risk be diversified away by investing in both Virtus Seix and Federated Equity 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 Seix and Federated Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Seix Government and Federated Equity Income, you can compare the effects of market volatilities on Virtus Seix and Federated Equity 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 Seix with a short position of Federated Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Seix and Federated Equity.
Diversification Opportunities for Virtus Seix and Federated Equity
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtus and Federated is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Seix Government and Federated Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Equity Income and Virtus Seix 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 Seix Government are associated (or correlated) with Federated Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Equity Income has no effect on the direction of Virtus Seix i.e., Virtus Seix and Federated Equity go up and down completely randomly.
Pair Corralation between Virtus Seix and Federated Equity
Assuming the 90 days horizon Virtus Seix is expected to generate 4.08 times less return on investment than Federated Equity. But when comparing it to its historical volatility, Virtus Seix Government is 7.26 times less risky than Federated Equity. It trades about 0.24 of its potential returns per unit of risk. Federated Equity Income is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,015 in Federated Equity Income on September 4, 2024 and sell it today you would earn a total of 629.00 from holding Federated Equity Income or generate 31.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
Virtus Seix Government vs. Federated Equity Income
Performance |
| Timeline |
| Virtus Seix Government |
| Federated Equity Income |
Virtus Seix and Federated Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Seix and Federated Equity
The main advantage of trading using opposite Virtus Seix and Federated Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Seix position performs unexpectedly, Federated Equity 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 Federated Equity will offset losses from the drop in Federated Equity's long position.| Virtus Seix vs. Virtus Global Real | Virtus Seix vs. Allianzgi Mid Cap Fund | Virtus Seix vs. Virtus Select Mlp | Virtus Seix vs. Virtus Rampart Enhanced |
| Federated Equity vs. Transamerica Emerging Markets | Federated Equity vs. Shelton Emerging Markets | Federated Equity vs. Commodities Strategy Fund | Federated Equity vs. Templeton Emerging Markets |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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