Correlation Between Virtus Multi-strategy and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Virtus Multi-strategy and Stone Ridge 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 Stone Ridge 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 Stone Ridge Diversified, you can compare the effects of market volatilities on Virtus Multi-strategy and Stone Ridge 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 Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi-strategy and Stone Ridge.
Diversification Opportunities for Virtus Multi-strategy and Stone Ridge
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Virtus and Stone is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Strategy Target and Stone Ridge Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge Diversified 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 Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge Diversified has no effect on the direction of Virtus Multi-strategy i.e., Virtus Multi-strategy and Stone Ridge go up and down completely randomly.
Pair Corralation between Virtus Multi-strategy and Stone Ridge
Assuming the 90 days horizon Virtus Multi Strategy Target is expected to under-perform the Stone Ridge. But the mutual fund apears to be less risky and, when comparing its historical volatility, Virtus Multi Strategy Target is 1.2 times less risky than Stone Ridge. The mutual fund trades about -0.29 of its potential returns per unit of risk. The Stone Ridge Diversified is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,055 in Stone Ridge Diversified on October 10, 2024 and sell it today you would earn a total of 13.00 from holding Stone Ridge Diversified or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Multi Strategy Target vs. Stone Ridge Diversified
Performance |
| Timeline |
| Virtus Multi Strategy |
| Stone Ridge Diversified |
Virtus Multi-strategy and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi-strategy and Stone Ridge
The main advantage of trading using opposite Virtus Multi-strategy and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi-strategy position performs unexpectedly, Stone Ridge 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 Stone Ridge will offset losses from the drop in Stone Ridge'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 |
| Stone Ridge vs. T Rowe Price | Stone Ridge vs. Mairs Power Growth | Stone Ridge vs. Mid Cap Growth | Stone Ridge vs. Morningstar Aggressive Growth |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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