Correlation Between Virtus and American Customer

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

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

Diversification Opportunities for Virtus and American Customer

0.0

Correlation Coefficient

Virtus  American Customer

Pay attention - limited upside

The 3 months correlation between Virtus and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Virtus and American Customer Satisfaction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Customer and Virtus 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 are associated (or correlated) with American Customer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Customer has no effect on the direction of Virtus i.e., Virtus and American Customer go up and down completely randomly.

Pair Corralation between Virtus and American Customer

If you would invest (100.00) in Virtus on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Virtus or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Virtus  vs.  American Customer Satisfaction

Virtus

Risk-Adjusted Performance

Very Weak

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

American Customer

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Customer Satisfaction has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, American Customer is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Virtus and American Customer

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

The idea behind Virtus and American Customer Satisfaction 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.