Correlation Between Virtus Multi-sector and New Economy
Can any of the company-specific risk be diversified away by investing in both Virtus Multi-sector and New Economy 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 New Economy 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 New Economy Fund, you can compare the effects of market volatilities on Virtus Multi-sector and New Economy 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 New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi-sector and New Economy.
Diversification Opportunities for Virtus Multi-sector and New Economy
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Virtus and New is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Sector Short and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund 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 New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Virtus Multi-sector i.e., Virtus Multi-sector and New Economy go up and down completely randomly.
Pair Corralation between Virtus Multi-sector and New Economy
Assuming the 90 days horizon Virtus Multi-sector is expected to generate 1.81 times less return on investment than New Economy. But when comparing it to its historical volatility, Virtus Multi Sector Short is 10.26 times less risky than New Economy. It trades about 0.09 of its potential returns per unit of risk. New Economy Fund is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,417 in New Economy Fund on November 2, 2024 and sell it today you would earn a total of 74.00 from holding New Economy Fund or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Multi Sector Short vs. New Economy Fund
Performance |
| Timeline |
| Virtus Multi Sector |
| New Economy Fund |
Virtus Multi-sector and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi-sector and New Economy
The main advantage of trading using opposite Virtus Multi-sector and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi-sector position performs unexpectedly, New Economy 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 New Economy will offset losses from the drop in New Economy's long position.| Virtus Multi-sector vs. Short Precious Metals | Virtus Multi-sector vs. International Investors Gold | Virtus Multi-sector vs. Vy Goldman Sachs | Virtus Multi-sector vs. Global Gold Fund |
| New Economy vs. Qs Large Cap | New Economy vs. Pnc Balanced Allocation | New Economy vs. Principal Lifetime Hybrid | New Economy vs. Alternative Asset Allocation |
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 Stocks Directory module to find actively traded stocks across global markets.
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