Correlation Between Ancora Microcap and Virtus Real

Can any of the company-specific risk be diversified away by investing in both Ancora Microcap and Virtus Real 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 Ancora Microcap and Virtus Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ancora Microcap Fund and Virtus Real Estate, you can compare the effects of market volatilities on Ancora Microcap and Virtus Real 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 Ancora Microcap with a short position of Virtus Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ancora Microcap and Virtus Real.

Diversification Opportunities for Ancora Microcap and Virtus Real

0.29

Correlation Coefficient

Ancora Microcap  Virtus Real

Modest diversification

The 3 months correlation between Ancora and Virtus is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ancora Microcap Fund and Virtus Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Real Estate and Ancora Microcap 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 Ancora Microcap Fund are associated (or correlated) with Virtus Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Real Estate has no effect on the direction of Ancora Microcap i.e., Ancora Microcap and Virtus Real go up and down completely randomly.

Pair Corralation between Ancora Microcap and Virtus Real

Assuming the 90 days horizon Ancora Microcap Fund is expected to under-perform the Virtus Real. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ancora Microcap Fund is 1.16 times less risky than Virtus Real. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Virtus Real Estate is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,861  in Virtus Real Estate on December 29, 2024 and sell it today you would lose (5.00) from holding Virtus Real Estate or give up 0.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Ancora Microcap Fund  vs.  Virtus Real Estate

Ancora Microcap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ancora Microcap Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Ancora Microcap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Virtus Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Virtus Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ancora Microcap and Virtus Real

The main advantage of trading using opposite Ancora Microcap and Virtus Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ancora Microcap position performs unexpectedly, Virtus Real 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 Real will offset losses from the drop in Virtus Real's long position.

The idea behind Ancora Microcap Fund and Virtus Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.