Correlation Between Virtus Multi-strategy and Western Asset
Can any of the company-specific risk be diversified away by investing in both Virtus Multi-strategy and Western Asset 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 Western Asset 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 Western Asset Inflation, you can compare the effects of market volatilities on Virtus Multi-strategy and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi-strategy and Western Asset.
Diversification Opportunities for Virtus Multi-strategy and Western Asset
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtus and Western is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Strategy Target and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Inflation has no effect on the direction of Virtus Multi-strategy i.e., Virtus Multi-strategy and Western Asset go up and down completely randomly.
Pair Corralation between Virtus Multi-strategy and Western Asset
Assuming the 90 days horizon Virtus Multi Strategy Target is expected to generate 0.65 times more return on investment than Western Asset. However, Virtus Multi Strategy Target is 1.54 times less risky than Western Asset. It trades about 0.1 of its potential returns per unit of risk. Western Asset Inflation is currently generating about 0.01 per unit of risk. If you would invest 1,581 in Virtus Multi Strategy Target on October 13, 2024 and sell it today you would earn a total of 216.00 from holding Virtus Multi Strategy Target or generate 13.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Virtus Multi Strategy Target vs. Western Asset Inflation
Performance |
| Timeline |
| Virtus Multi Strategy |
| Western Asset Inflation |
Virtus Multi-strategy and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi-strategy and Western Asset
The main advantage of trading using opposite Virtus Multi-strategy and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi-strategy position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Virtus Multi-strategy vs. Siit Equity Factor | Virtus Multi-strategy vs. Qs Global Equity | Virtus Multi-strategy vs. Old Westbury Fixed | Virtus Multi-strategy vs. Dws Equity Sector |
| Western Asset vs. Ashmore Emerging Markets | Western Asset vs. Wcm Focused Emerging | Western Asset vs. Black Oak Emerging | Western Asset vs. Virtus Multi Strategy Target |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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