Correlation Between Virtus International and Virtus Emerging
Can any of the company-specific risk be diversified away by investing in both Virtus International and Virtus Emerging 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 International and Virtus Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus International Small Cap and Virtus Emerging Markets, you can compare the effects of market volatilities on Virtus International and Virtus Emerging 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 International with a short position of Virtus Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus International and Virtus Emerging.
Diversification Opportunities for Virtus International and Virtus Emerging
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and Virtus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Virtus International Small Cap and Virtus Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Emerging Markets and Virtus International 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 International Small Cap are associated (or correlated) with Virtus Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Emerging Markets has no effect on the direction of Virtus International i.e., Virtus International and Virtus Emerging go up and down completely randomly.
Pair Corralation between Virtus International and Virtus Emerging
Assuming the 90 days horizon Virtus International Small Cap is expected to generate 1.58 times more return on investment than Virtus Emerging. However, Virtus International is 1.58 times more volatile than Virtus Emerging Markets. It trades about -0.02 of its potential returns per unit of risk. Virtus Emerging Markets is currently generating about -0.18 per unit of risk. If you would invest 1,940 in Virtus International Small Cap on September 1, 2024 and sell it today you would lose (6.00) from holding Virtus International Small Cap or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Virtus International Small Cap vs. Virtus Emerging Markets
Performance |
| Timeline |
| Virtus International |
| Virtus Emerging Markets |
Virtus International and Virtus Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus International and Virtus Emerging
The main advantage of trading using opposite Virtus International and Virtus Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus International position performs unexpectedly, Virtus Emerging 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 Emerging will offset losses from the drop in Virtus Emerging's long position.| Virtus International vs. Virtus International Small Cap | Virtus International vs. Virtus Kar Small Cap | Virtus International vs. Federated Mdt Small | Virtus International vs. Fidelity International Small |
| Virtus Emerging vs. International Investors Gold | Virtus Emerging vs. Precious Metals And | Virtus Emerging vs. Invesco Gold Special | Virtus Emerging vs. Oppenheimer Gold Special |
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 Stocks Directory module to find actively traded stocks across global markets.
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