Correlation Between Virtus Multi-sector and Banking Fund
Can any of the company-specific risk be diversified away by investing in both Virtus Multi-sector and Banking Fund 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 Banking Fund 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 Banking Fund Class, you can compare the effects of market volatilities on Virtus Multi-sector and Banking Fund 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 Banking Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi-sector and Banking Fund.
Diversification Opportunities for Virtus Multi-sector and Banking Fund
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Virtus and Banking is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Sector Short and Banking Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banking Fund Class 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 Banking Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banking Fund Class has no effect on the direction of Virtus Multi-sector i.e., Virtus Multi-sector and Banking Fund go up and down completely randomly.
Pair Corralation between Virtus Multi-sector and Banking Fund
Assuming the 90 days horizon Virtus Multi-sector is expected to generate 5.03 times less return on investment than Banking Fund. But when comparing it to its historical volatility, Virtus Multi Sector Short is 11.23 times less risky than Banking Fund. It trades about 0.17 of its potential returns per unit of risk. Banking Fund Class is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8,244 in Banking Fund Class on October 25, 2024 and sell it today you would earn a total of 1,157 from holding Banking Fund Class or generate 14.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Multi Sector Short vs. Banking Fund Class
Performance |
| Timeline |
| Virtus Multi Sector |
| Banking Fund Class |
Virtus Multi-sector and Banking Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Multi-sector and Banking Fund
The main advantage of trading using opposite Virtus Multi-sector and Banking Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Multi-sector position performs unexpectedly, Banking Fund 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 Banking Fund will offset losses from the drop in Banking Fund'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 |
| Banking Fund vs. Davenport Small Cap | Banking Fund vs. Lord Abbett Diversified | Banking Fund vs. Madison Diversified Income | Banking Fund vs. T Rowe Price |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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