Correlation Between Virtus Multi-strategy and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Virtus Multi-strategy and Mid Cap 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 Mid Cap 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 Mid Cap 15x Strategy, you can compare the effects of market volatilities on Virtus Multi-strategy and Mid Cap 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 Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi-strategy and Mid Cap.
Diversification Opportunities for Virtus Multi-strategy and Mid Cap
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtus and Mid is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Strategy Target and Mid Cap 15x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap 15x 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 Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap 15x has no effect on the direction of Virtus Multi-strategy i.e., Virtus Multi-strategy and Mid Cap go up and down completely randomly.
Pair Corralation between Virtus Multi-strategy and Mid Cap
Assuming the 90 days horizon Virtus Multi-strategy is expected to generate 2.34 times less return on investment than Mid Cap. But when comparing it to its historical volatility, Virtus Multi Strategy Target is 6.05 times less risky than Mid Cap. It trades about 0.1 of its potential returns per unit of risk. Mid Cap 15x Strategy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10,435 in Mid Cap 15x Strategy on October 11, 2024 and sell it today you would earn a total of 2,974 from holding Mid Cap 15x Strategy or generate 28.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Virtus Multi Strategy Target vs. Mid Cap 15x Strategy
Performance |
| Timeline |
| Virtus Multi Strategy |
| Mid Cap 15x |
Virtus Multi-strategy and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi-strategy and Mid Cap
The main advantage of trading using opposite Virtus Multi-strategy and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi-strategy position performs unexpectedly, Mid Cap 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 Mid Cap will offset losses from the drop in Mid Cap's long position.| Virtus Multi-strategy vs. Commodities Strategy Fund | Virtus Multi-strategy vs. Predex Funds | Virtus Multi-strategy vs. Alternative Asset Allocation | Virtus Multi-strategy vs. Ab Small Cap |
| Mid Cap vs. Virtus Multi Strategy Target | Mid Cap vs. Calvert Emerging Markets | Mid Cap vs. Oberweis Emerging Growth | Mid Cap vs. Fidelity Series Emerging |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |