Correlation Between Virtus and Virtus Newfleet

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

By analyzing existing cross correlation between Virtus and Virtus Newfleet Multi Sector, you can compare the effects of market volatilities on Virtus and Virtus Newfleet 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 Virtus Newfleet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus and Virtus Newfleet.

Diversification Opportunities for Virtus and Virtus Newfleet

0.37

Correlation Coefficient

Virtus  Virtus Newfleet

Weak diversification

The 3 months correlation between Virtus and Virtus is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Virtus and Virtus Newfleet Multi Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Newfleet Multi 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 Virtus Newfleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Newfleet Multi has no effect on the direction of Virtus i.e., Virtus and Virtus Newfleet go up and down completely randomly.

Pair Corralation between Virtus and Virtus Newfleet

Given the investment horizon of 90 days Virtus is expected to generate 1.27 times more return on investment than Virtus Newfleet. However, Virtus is 1.27 times more volatile than Virtus Newfleet Multi Sector. It trades about 0.08 of its potential returns per unit of risk. Virtus Newfleet Multi Sector is currently generating about 0.09 per unit of risk. If you would invest  2,041  in Virtus on October 11, 2024 and sell it today you would earn a total of  74.00  from holding Virtus or generate 3.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	25.81%
Values	Daily Returns

Virtus  vs.  Virtus Newfleet Multi Sector

Virtus

Risk-Adjusted Performance

0 of 100

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.

Virtus Newfleet Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Newfleet Multi Sector has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Virtus Newfleet is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Virtus and Virtus Newfleet

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

The idea behind Virtus and Virtus Newfleet Multi Sector 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.