Correlation Between Virtus Multi-strategy and Virtus Global
Can any of the company-specific risk be diversified away by investing in both Virtus Multi-strategy and Virtus Global 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 Virtus Global 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 Global Real, you can compare the effects of market volatilities on Virtus Multi-strategy and Virtus Global 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 Virtus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi-strategy and Virtus Global.
Diversification Opportunities for Virtus Multi-strategy and Virtus Global
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and Virtus is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Strategy Target and Virtus Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Global Real 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 Virtus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Global Real has no effect on the direction of Virtus Multi-strategy i.e., Virtus Multi-strategy and Virtus Global go up and down completely randomly.
Pair Corralation between Virtus Multi-strategy and Virtus Global
Assuming the 90 days horizon Virtus Multi-strategy is expected to generate 1.55 times less return on investment than Virtus Global. But when comparing it to its historical volatility, Virtus Multi Strategy Target is 3.75 times less risky than Virtus Global. It trades about 0.14 of its potential returns per unit of risk. Virtus Global Real is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,098 in Virtus Global Real on August 31, 2024 and sell it today you would earn a total of 635.00 from holding Virtus Global Real or generate 20.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Virtus Multi Strategy Target vs. Virtus Global Real
Performance |
| Timeline |
| Virtus Multi Strategy |
| Virtus Global Real |
Virtus Multi-strategy and Virtus Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi-strategy and Virtus Global
The main advantage of trading using opposite Virtus Multi-strategy and Virtus Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi-strategy position performs unexpectedly, Virtus Global 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 Global will offset losses from the drop in Virtus Global's long position.| Virtus Multi-strategy vs. Royce Global Financial | Virtus Multi-strategy vs. 1919 Financial Services | Virtus Multi-strategy vs. Davis Financial Fund | Virtus Multi-strategy vs. Fidelity Advisor Financial |
| Virtus Global vs. Virtus Global Real | Virtus Global vs. Virtus Global Real | Virtus Global vs. Virtus Global Real | Virtus Global vs. Virtus Kar Mid Cap |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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