Correlation Between Cajxx and Virtus Nfj

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

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

Diversification Opportunities for Cajxx and Virtus Nfj

-0.32

Correlation Coefficient

Cajxx  Virtus Nfj

Very good diversification

The 3 months correlation between Cajxx and Virtus is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Cajxx and Virtus Nfj Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Nfj Large and Cajxx 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 Cajxx are associated (or correlated) with Virtus Nfj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Nfj Large has no effect on the direction of Cajxx i.e., Cajxx and Virtus Nfj go up and down completely randomly.

Pair Corralation between Cajxx and Virtus Nfj

Assuming the 90 days horizon Cajxx is expected to generate 59.8 times more return on investment than Virtus Nfj. However, Cajxx is 59.8 times more volatile than Virtus Nfj Large Cap. It trades about 0.08 of its potential returns per unit of risk. Virtus Nfj Large Cap is currently generating about 0.05 per unit of risk. If you would invest  521.00  in Cajxx on September 30, 2024 and sell it today you would lose (421.00) from holding Cajxx or give up 80.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Cajxx  vs.  Virtus Nfj Large Cap

Cajxx

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cajxx are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Cajxx showed solid returns over the last few months and may actually be approaching a breakup point.

Virtus Nfj Large

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cajxx and Virtus Nfj

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

The idea behind Cajxx and Virtus Nfj Large Cap 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.