Correlation Between Virtus Multi-sector and Catalyst/smh High
Can any of the company-specific risk be diversified away by investing in both Virtus Multi-sector and Catalyst/smh High 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-sector and Catalyst/smh High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Multi Sector Short and Catalystsmh High Income, you can compare the effects of market volatilities on Virtus Multi-sector and Catalyst/smh High 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-sector with a short position of Catalyst/smh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi-sector and Catalyst/smh High.
Diversification Opportunities for Virtus Multi-sector and Catalyst/smh High
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtus and Catalyst/smh is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Sector Short and Catalystsmh High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh High Income and Virtus Multi-sector 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 Sector Short are associated (or correlated) with Catalyst/smh High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh High Income has no effect on the direction of Virtus Multi-sector i.e., Virtus Multi-sector and Catalyst/smh High go up and down completely randomly.
Pair Corralation between Virtus Multi-sector and Catalyst/smh High
Assuming the 90 days horizon Virtus Multi Sector Short is expected to generate 0.54 times more return on investment than Catalyst/smh High. However, Virtus Multi Sector Short is 1.87 times less risky than Catalyst/smh High. It trades about 0.15 of its potential returns per unit of risk. Catalystsmh High Income is currently generating about -0.05 per unit of risk. If you would invest 451.00 in Virtus Multi Sector Short on October 25, 2024 and sell it today you would earn a total of 4.00 from holding Virtus Multi Sector Short or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Multi Sector Short vs. Catalystsmh High Income
Performance |
| Timeline |
| Virtus Multi Sector |
| Catalystsmh High Income |
Virtus Multi-sector and Catalyst/smh High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi-sector and Catalyst/smh High
The main advantage of trading using opposite Virtus Multi-sector and Catalyst/smh High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi-sector position performs unexpectedly, Catalyst/smh High 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 Catalyst/smh High will offset losses from the drop in Catalyst/smh High's long position.| Virtus Multi-sector vs. Virtus Seix Government | Virtus Multi-sector vs. Blrc Sgy Mnp | Virtus Multi-sector vs. Bbh Intermediate Municipal | Virtus Multi-sector vs. Intermediate Term Tax Free Bond |
| Catalyst/smh High vs. Victory Rs Partners | Catalyst/smh High vs. Fidelity Small Cap | Catalyst/smh High vs. Small Cap Value | Catalyst/smh High vs. Ab Small 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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