Correlation Between Virtus International and Wasatch Emerging
Can any of the company-specific risk be diversified away by investing in both Virtus International and Wasatch 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 Wasatch 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 Wasatch Emerging India, you can compare the effects of market volatilities on Virtus International and Wasatch 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 Wasatch Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus International and Wasatch Emerging.
Diversification Opportunities for Virtus International and Wasatch Emerging
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and Wasatch is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Virtus International Small Cap and Wasatch Emerging India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Emerging India 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 Wasatch Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Emerging India has no effect on the direction of Virtus International i.e., Virtus International and Wasatch Emerging go up and down completely randomly.
Pair Corralation between Virtus International and Wasatch Emerging
Assuming the 90 days horizon Virtus International Small Cap is expected to under-perform the Wasatch Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Virtus International Small Cap is 1.17 times less risky than Wasatch Emerging. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Wasatch Emerging India is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 691.00 in Wasatch Emerging India on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Wasatch Emerging India or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus International Small Cap vs. Wasatch Emerging India
Performance |
| Timeline |
| Virtus International |
| Wasatch Emerging India |
Virtus International and Wasatch Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus International and Wasatch Emerging
The main advantage of trading using opposite Virtus International and Wasatch Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus International position performs unexpectedly, Wasatch 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 Wasatch Emerging will offset losses from the drop in Wasatch Emerging's long position.| Virtus International vs. Motorola Solutions | Virtus International vs. MOTOROLA SOLTN | Virtus International vs. Eaton Vance Large Cap |
| Wasatch Emerging vs. Matthews India Fund | Wasatch Emerging vs. Wasatch Emerging Markets | Wasatch Emerging vs. Wasatch Emerging Markets | Wasatch Emerging vs. iShares MSCI India |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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