Correlation Between Virtus Multi and Catalystmillburn
Can any of the company-specific risk be diversified away by investing in both Virtus Multi and Catalystmillburn 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 Catalystmillburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Virtus Multi and Catalystmillburn 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 Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi and Catalystmillburn.
Diversification Opportunities for Virtus Multi and Catalystmillburn
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Virtus and Catalystmillburn is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Sector Short and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Sector Short are associated (or correlated) with Catalystmillburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Virtus Multi i.e., Virtus Multi and Catalystmillburn go up and down completely randomly.
Pair Corralation between Virtus Multi and Catalystmillburn
Assuming the 90 days horizon Virtus Multi is expected to generate 2.12 times less return on investment than Catalystmillburn. But when comparing it to its historical volatility, Virtus Multi Sector Short is 4.26 times less risky than Catalystmillburn. It trades about 0.16 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,396 in Catalystmillburn Hedge Strategy on September 14, 2024 and sell it today you would earn a total of 469.00 from holding Catalystmillburn Hedge Strategy or generate 13.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Multi Sector Short vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Virtus Multi Sector |
| Catalystmillburn Hedge |
Virtus Multi and Catalystmillburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi and Catalystmillburn
The main advantage of trading using opposite Virtus Multi and Catalystmillburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi position performs unexpectedly, Catalystmillburn 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 Catalystmillburn will offset losses from the drop in Catalystmillburn's long position.| Virtus Multi vs. Putnam Money Market | Virtus Multi vs. Franklin Government Money | Virtus Multi vs. Elfun Government Money | Virtus Multi vs. John Hancock Money |
| Catalystmillburn vs. T Rowe Price | Catalystmillburn vs. Fidelity Advisor Diversified | Catalystmillburn vs. Pioneer Diversified High | Catalystmillburn vs. Small Cap Stock |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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