Correlation Between Virtus Multi and Virtus Westchester
Can any of the company-specific risk be diversified away by investing in both Virtus Multi and Virtus Westchester 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 Westchester 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 Westchester Credit, you can compare the effects of market volatilities on Virtus Multi and Virtus Westchester 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 Westchester. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi and Virtus Westchester.
Diversification Opportunities for Virtus Multi and Virtus Westchester
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virtus and Virtus is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Strategy Target and Virtus Westchester Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Westchester Credit 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 Westchester. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Westchester Credit has no effect on the direction of Virtus Multi i.e., Virtus Multi and Virtus Westchester go up and down completely randomly.
Pair Corralation between Virtus Multi and Virtus Westchester
Assuming the 90 days horizon Virtus Multi Strategy Target is expected to generate 2.7 times more return on investment than Virtus Westchester. However, Virtus Multi is 2.7 times more volatile than Virtus Westchester Credit. It trades about 0.16 of its potential returns per unit of risk. Virtus Westchester Credit is currently generating about 0.38 per unit of risk. If you would invest 1,690 in Virtus Multi Strategy Target on September 3, 2024 and sell it today you would earn a total of 131.00 from holding Virtus Multi Strategy Target or generate 7.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Multi Strategy Target vs. Virtus Westchester Credit
Performance |
| Timeline |
| Virtus Multi Strategy |
| Virtus Westchester Credit |
Virtus Multi and Virtus Westchester Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi and Virtus Westchester
The main advantage of trading using opposite Virtus Multi and Virtus Westchester positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi position performs unexpectedly, Virtus Westchester 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 Westchester will offset losses from the drop in Virtus Westchester's long position.| Virtus Multi vs. Federated Short Term Income | Virtus Multi vs. Siit Ultra Short | Virtus Multi vs. Aqr Long Short Equity | Virtus Multi vs. Vanguard Institutional Short Term |
| Virtus Westchester vs. Blackrock Exchange Portfolio | Virtus Westchester vs. Schwab Treasury Money | Virtus Westchester vs. Aig Government Money | Virtus Westchester vs. Hsbc Treasury Money |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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