Correlation Between Bitcoin and Virtus Foreign

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

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

Diversification Opportunities for Bitcoin and Virtus Foreign

0.74

Correlation Coefficient

Bitcoin  Virtus Foreign

Poor diversification

The 3 months correlation between Bitcoin and Virtus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Virtus Foreign Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Foreign Oppor and Bitcoin 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 Bitcoin are associated (or correlated) with Virtus Foreign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Foreign Oppor has no effect on the direction of Bitcoin i.e., Bitcoin and Virtus Foreign go up and down completely randomly.

Pair Corralation between Bitcoin and Virtus Foreign

Assuming the 90 days trading horizon Bitcoin is expected to generate 10.96 times more return on investment than Virtus Foreign. However, Bitcoin is 10.96 times more volatile than Virtus Foreign Opportunities. It trades about 0.08 of its potential returns per unit of risk. Virtus Foreign Opportunities is currently generating about 0.07 per unit of risk. If you would invest  2,278,992  in Bitcoin on October 11, 2024 and sell it today you would earn a total of  7,222,002  from holding Bitcoin or generate 316.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.32%
Values	Daily Returns

Bitcoin  vs.  Virtus Foreign Opportunities

Bitcoin

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Virtus Foreign Oppor

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bitcoin and Virtus Foreign

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

The idea behind Bitcoin and Virtus Foreign Opportunities 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.