Correlation Between FlexShares Core and Virtus

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

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

Diversification Opportunities for FlexShares Core and Virtus

0.0

Correlation Coefficient

FlexShares Core  Virtus

Pay attention - limited upside

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

Pair Corralation between FlexShares Core and Virtus

If you would invest  2,164  in FlexShares Core Select on December 30, 2024 and sell it today you would earn a total of  53.00  from holding FlexShares Core Select or generate 2.45% return on investment over 90 days.

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

FlexShares Core Select  vs.  Virtus

FlexShares Core Select

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FlexShares Core Select are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, FlexShares Core is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FlexShares Core and Virtus

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

The idea behind FlexShares Core Select and Virtus 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.