Correlation Between Virtus Multi and Virtus Bond
Can any of the company-specific risk be diversified away by investing in both Virtus Multi and Virtus Bond 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 Virtus Bond 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 Virtus Bond Fund, you can compare the effects of market volatilities on Virtus Multi and Virtus Bond 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 Virtus Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi and Virtus Bond.
Diversification Opportunities for Virtus Multi and Virtus Bond
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and Virtus is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Strategy Target and Virtus Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Bond Fund 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 Virtus Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Bond Fund has no effect on the direction of Virtus Multi i.e., Virtus Multi and Virtus Bond go up and down completely randomly.
Pair Corralation between Virtus Multi and Virtus Bond
Assuming the 90 days horizon Virtus Multi Strategy Target is expected to generate 0.65 times more return on investment than Virtus Bond. However, Virtus Multi Strategy Target is 1.53 times less risky than Virtus Bond. It trades about 0.07 of its potential returns per unit of risk. Virtus Bond Fund is currently generating about -0.02 per unit of risk. If you would invest 1,810 in Virtus Multi Strategy Target on August 27, 2024 and sell it today you would earn a total of 5.00 from holding Virtus Multi Strategy Target or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Multi Strategy Target vs. Virtus Bond Fund
Performance |
| Timeline |
| Virtus Multi Strategy |
| Virtus Bond Fund |
Virtus Multi and Virtus Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi and Virtus Bond
The main advantage of trading using opposite Virtus Multi and Virtus Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi position performs unexpectedly, Virtus Bond 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 Virtus Bond will offset losses from the drop in Virtus Bond's long position.| Virtus Multi vs. Invesco Global Health | Virtus Multi vs. Prudential Health Sciences | Virtus Multi vs. Fidelity Advisor Health | Virtus Multi vs. Delaware Healthcare Fund |
| Virtus Bond vs. Target Retirement 2040 | Virtus Bond vs. Calvert Moderate Allocation | Virtus Bond vs. Hartford Moderate Allocation | Virtus Bond vs. Moderately Aggressive Balanced |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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