Correlation Between Virtus Kar and Dow 2x
Can any of the company-specific risk be diversified away by investing in both Virtus Kar and Dow 2x 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 Kar and Dow 2x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Kar Mid Cap and Dow 2x Strategy, you can compare the effects of market volatilities on Virtus Kar and Dow 2x 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 Kar with a short position of Dow 2x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Kar and Dow 2x.
Diversification Opportunities for Virtus Kar and Dow 2x
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and Dow is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Kar Mid Cap and Dow 2x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow 2x Strategy and Virtus Kar 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 Kar Mid Cap are associated (or correlated) with Dow 2x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow 2x Strategy has no effect on the direction of Virtus Kar i.e., Virtus Kar and Dow 2x go up and down completely randomly.
Pair Corralation between Virtus Kar and Dow 2x
Assuming the 90 days horizon Virtus Kar is expected to generate 13.7 times less return on investment than Dow 2x. But when comparing it to its historical volatility, Virtus Kar Mid Cap is 2.14 times less risky than Dow 2x. It trades about 0.02 of its potential returns per unit of risk. Dow 2x Strategy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 14,496 in Dow 2x Strategy on August 25, 2024 and sell it today you would earn a total of 631.00 from holding Dow 2x Strategy or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Kar Mid Cap vs. Dow 2x Strategy
Performance |
| Timeline |
| Virtus Kar Mid |
| Dow 2x Strategy |
Virtus Kar and Dow 2x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Kar and Dow 2x
The main advantage of trading using opposite Virtus Kar and Dow 2x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Kar position performs unexpectedly, Dow 2x 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 Dow 2x will offset losses from the drop in Dow 2x's long position.| Virtus Kar vs. T Rowe Price | Virtus Kar vs. T Rowe Price | Virtus Kar vs. T Rowe Price | Virtus Kar vs. T Rowe Price |
| Dow 2x vs. Nasdaq 100 2x Strategy | Dow 2x vs. Nasdaq 100 2x Strategy | Dow 2x vs. Nasdaq 100 2x Strategy | Dow 2x vs. Ultra Nasdaq 100 Profunds |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |