Correlation Between Virtus Multi-sector and Virtus Senior
Can any of the company-specific risk be diversified away by investing in both Virtus Multi-sector and Virtus Senior 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 Virtus Senior 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 Virtus Senior Floating, you can compare the effects of market volatilities on Virtus Multi-sector and Virtus Senior 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 Virtus Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi-sector and Virtus Senior.
Diversification Opportunities for Virtus Multi-sector and Virtus Senior
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and Virtus is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Sector Short and Virtus Senior Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Senior Floating 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 Virtus Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Senior Floating has no effect on the direction of Virtus Multi-sector i.e., Virtus Multi-sector and Virtus Senior go up and down completely randomly.
Pair Corralation between Virtus Multi-sector and Virtus Senior
Assuming the 90 days horizon Virtus Multi Sector Short is expected to generate 3.13 times more return on investment than Virtus Senior. However, Virtus Multi-sector is 3.13 times more volatile than Virtus Senior Floating. It trades about 0.22 of its potential returns per unit of risk. Virtus Senior Floating is currently generating about -0.49 per unit of risk. If you would invest 455.00 in Virtus Multi Sector Short on December 4, 2024 and sell it today you would earn a total of 3.00 from holding Virtus Multi Sector Short or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Multi Sector Short vs. Virtus Senior Floating
Performance |
| Timeline |
| Virtus Multi Sector |
| Virtus Senior Floating |
Virtus Multi-sector and Virtus Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi-sector and Virtus Senior
The main advantage of trading using opposite Virtus Multi-sector and Virtus Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi-sector position performs unexpectedly, Virtus Senior 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 Senior will offset losses from the drop in Virtus Senior's long position.| Virtus Multi-sector vs. Ashmore Emerging Markets | Virtus Multi-sector vs. Catholic Responsible Investments | Virtus Multi-sector vs. T Rowe Price | Virtus Multi-sector vs. T Rowe Price |
| Virtus Senior vs. Franklin Small Cap | Virtus Senior vs. Vulcan Value Partners | Virtus Senior vs. Transamerica International Small | Virtus Senior vs. Ep Emerging Markets |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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