Correlation Between Virtus Multi-strategy and Health Care
Can any of the company-specific risk be diversified away by investing in both Virtus Multi-strategy and Health Care 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 Health Care 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 Health Care Ultrasector, you can compare the effects of market volatilities on Virtus Multi-strategy and Health Care 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 Health Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi-strategy and Health Care.
Diversification Opportunities for Virtus Multi-strategy and Health Care
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Virtus and Health is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Strategy Target and Health Care Ultrasector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Care Ultrasector 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 Health Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Care Ultrasector has no effect on the direction of Virtus Multi-strategy i.e., Virtus Multi-strategy and Health Care go up and down completely randomly.
Pair Corralation between Virtus Multi-strategy and Health Care
Assuming the 90 days horizon Virtus Multi Strategy Target is expected to under-perform the Health Care. But the mutual fund apears to be less risky and, when comparing its historical volatility, Virtus Multi Strategy Target is 6.76 times less risky than Health Care. The mutual fund trades about -0.32 of its potential returns per unit of risk. The Health Care Ultrasector is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10,022 in Health Care Ultrasector on October 15, 2024 and sell it today you would earn a total of 79.00 from holding Health Care Ultrasector or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Multi Strategy Target vs. Health Care Ultrasector
Performance |
| Timeline |
| Virtus Multi Strategy |
| Health Care Ultrasector |
Virtus Multi-strategy and Health Care Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi-strategy and Health Care
The main advantage of trading using opposite Virtus Multi-strategy and Health Care positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi-strategy position performs unexpectedly, Health Care 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 Health Care will offset losses from the drop in Health Care's long position.| Virtus Multi-strategy vs. Arrow Managed Futures | Virtus Multi-strategy vs. Aqr Managed Futures | Virtus Multi-strategy vs. Lord Abbett Inflation | Virtus Multi-strategy vs. Inflation Adjusted Bond Fund |
| Health Care vs. Artisan Developing World | Health Care vs. Black Oak Emerging | Health Care vs. Nasdaq 100 2x Strategy | Health Care vs. Virtus Multi Strategy Target |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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