Correlation Between Mid Cap and Virtus Kar
Can any of the company-specific risk be diversified away by investing in both Mid Cap and Virtus Kar 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 Mid Cap and Virtus Kar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap Growth and Virtus Kar Small Cap, you can compare the effects of market volatilities on Mid Cap and Virtus Kar 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 Mid Cap with a short position of Virtus Kar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Virtus Kar.
Diversification Opportunities for Mid Cap and Virtus Kar
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mid and Virtus is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Growth and Virtus Kar Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Kar Small and Mid Cap 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 Mid Cap Growth are associated (or correlated) with Virtus Kar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Kar Small has no effect on the direction of Mid Cap i.e., Mid Cap and Virtus Kar go up and down completely randomly.
Pair Corralation between Mid Cap and Virtus Kar
Assuming the 90 days horizon Mid Cap Growth is expected to generate 0.94 times more return on investment than Virtus Kar. However, Mid Cap Growth is 1.07 times less risky than Virtus Kar. It trades about 0.49 of its potential returns per unit of risk. Virtus Kar Small Cap is currently generating about 0.35 per unit of risk. If you would invest 4,004 in Mid Cap Growth on September 3, 2024 and sell it today you would earn a total of 514.00 from holding Mid Cap Growth or generate 12.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap Growth vs. Virtus Kar Small Cap
Performance |
| Timeline |
| Mid Cap Growth |
| Virtus Kar Small |
Mid Cap and Virtus Kar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Cap and Virtus Kar
The main advantage of trading using opposite Mid Cap and Virtus Kar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap position performs unexpectedly, Virtus Kar 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 Kar will offset losses from the drop in Virtus Kar's long position.| Mid Cap vs. Touchstone Mid Cap | Mid Cap vs. Federated Mdt Small | Mid Cap vs. Harding Loevner International | Mid Cap vs. Sterling Capital Equity |
| Virtus Kar vs. The Hartford Midcap | Virtus Kar vs. Mfs Emerging Markets | Virtus Kar vs. Wells Fargo Special | Virtus Kar vs. Washington Mutual Investors |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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