Correlation Between Virtus Emerging and California Bond
Can any of the company-specific risk be diversified away by investing in both Virtus Emerging and California Bond 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 Emerging and California Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Emerging Markets and California Bond Fund, you can compare the effects of market volatilities on Virtus Emerging and California Bond 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 Emerging with a short position of California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Emerging and California Bond.
Diversification Opportunities for Virtus Emerging and California Bond
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Virtus and California is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Emerging Markets and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Bond and Virtus Emerging 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 Emerging Markets are associated (or correlated) with California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of Virtus Emerging i.e., Virtus Emerging and California Bond go up and down completely randomly.
Pair Corralation between Virtus Emerging and California Bond
Assuming the 90 days horizon Virtus Emerging Markets is expected to under-perform the California Bond. In addition to that, Virtus Emerging is 1.29 times more volatile than California Bond Fund. It trades about -0.18 of its total potential returns per unit of risk. California Bond Fund is currently generating about 0.22 per unit of volatility. If you would invest 1,035 in California Bond Fund on September 1, 2024 and sell it today you would earn a total of 16.00 from holding California Bond Fund or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Emerging Markets vs. California Bond Fund
Performance |
| Timeline |
| Virtus Emerging Markets |
| California Bond |
Virtus Emerging and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Emerging and California Bond
The main advantage of trading using opposite Virtus Emerging and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Emerging position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond's long position.| Virtus Emerging vs. International Investors Gold | Virtus Emerging vs. Precious Metals And | Virtus Emerging vs. Invesco Gold Special | Virtus Emerging vs. Oppenheimer Gold Special |
| California Bond vs. Income Fund Income | California Bond vs. Usaa Nasdaq 100 | California Bond vs. Intermediate Term Bond Fund | California Bond vs. Usaa Intermediate Term |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |