Correlation Between Virtus Multi and New Perspective
Can any of the company-specific risk be diversified away by investing in both Virtus Multi and New Perspective 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 and New Perspective 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 New Perspective Fund, you can compare the effects of market volatilities on Virtus Multi and New Perspective 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 with a short position of New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi and New Perspective.
Diversification Opportunities for Virtus Multi and New Perspective
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtus and New is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Strategy Target and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective and Virtus Multi 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 New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Virtus Multi i.e., Virtus Multi and New Perspective go up and down completely randomly.
Pair Corralation between Virtus Multi and New Perspective
Assuming the 90 days horizon Virtus Multi is expected to generate 2.19 times less return on investment than New Perspective. But when comparing it to its historical volatility, Virtus Multi Strategy Target is 5.06 times less risky than New Perspective. It trades about 0.08 of its potential returns per unit of risk. New Perspective Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,889 in New Perspective Fund on November 2, 2024 and sell it today you would earn a total of 171.00 from holding New Perspective Fund or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Multi Strategy Target vs. New Perspective Fund
Performance |
| Timeline |
| Virtus Multi Strategy |
| New Perspective |
Virtus Multi and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi and New Perspective
The main advantage of trading using opposite Virtus Multi and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Virtus Multi vs. Ab Small Cap | Virtus Multi vs. Ultramid Cap Profund Ultramid Cap | Virtus Multi vs. Great West Loomis Sayles | Virtus Multi vs. Amg River Road |
| New Perspective vs. Arrow Dwa Balanced | New Perspective vs. Barings Active Short | New Perspective vs. Nuveen Mid Cap | New Perspective vs. Nasdaq 100 Index Fund |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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