Correlation Between Virtus Multi-strategy and American Funds
Can any of the company-specific risk be diversified away by investing in both Virtus Multi-strategy and American Funds 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 Multi-strategy and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Multi Strategy Target and American Funds Lege, you can compare the effects of market volatilities on Virtus Multi-strategy and American Funds 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 Multi-strategy with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi-strategy and American Funds.
Diversification Opportunities for Virtus Multi-strategy and American Funds
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and American is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Strategy Target and American Funds Lege in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Lege and Virtus Multi-strategy 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 Multi Strategy Target are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Lege has no effect on the direction of Virtus Multi-strategy i.e., Virtus Multi-strategy and American Funds go up and down completely randomly.
Pair Corralation between Virtus Multi-strategy and American Funds
Assuming the 90 days horizon Virtus Multi Strategy Target is expected to generate 1.05 times more return on investment than American Funds. However, Virtus Multi-strategy is 1.05 times more volatile than American Funds Lege. It trades about 0.25 of its potential returns per unit of risk. American Funds Lege is currently generating about 0.23 per unit of risk. If you would invest 1,799 in Virtus Multi Strategy Target on November 3, 2024 and sell it today you would earn a total of 19.00 from holding Virtus Multi Strategy Target or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Virtus Multi Strategy Target vs. American Funds Lege
Performance |
| Timeline |
| Virtus Multi Strategy |
| American Funds Lege |
Virtus Multi-strategy and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi-strategy and American Funds
The main advantage of trading using opposite Virtus Multi-strategy and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi-strategy position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Virtus Multi-strategy vs. Neuberger Berman Real | Virtus Multi-strategy vs. Vanguard Reit Index | Virtus Multi-strategy vs. Amg Managers Centersquare | Virtus Multi-strategy vs. Tiaa Cref Real Estate |
| American Funds vs. Cref Inflation Linked Bond | American Funds vs. Asg Managed Futures | American Funds vs. Tiaa Cref Inflation Linked Bond | American Funds vs. Atac Inflation Rotation |
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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