Correlation Between Altrius Global and Virtus WMC

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

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

Diversification Opportunities for Altrius Global and Virtus WMC

0.87

Correlation Coefficient

Altrius Global  Virtus WMC

Very poor diversification

The 3 months correlation between Altrius and Virtus is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Altrius Global Dividend and Virtus WMC International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus WMC International and Altrius Global 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 Altrius Global Dividend are associated (or correlated) with Virtus WMC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus WMC International has no effect on the direction of Altrius Global i.e., Altrius Global and Virtus WMC go up and down completely randomly.

Pair Corralation between Altrius Global and Virtus WMC

Given the investment horizon of 90 days Altrius Global Dividend is expected to under-perform the Virtus WMC. In addition to that, Altrius Global is 1.0 times more volatile than Virtus WMC International. It trades about -0.29 of its total potential returns per unit of risk. Virtus WMC International is currently generating about -0.15 per unit of volatility. If you would invest  2,746  in Virtus WMC International on October 9, 2024 and sell it today you would lose (58.00) from holding Virtus WMC International or give up 2.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Altrius Global Dividend  vs.  Virtus WMC International

Altrius Global Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altrius Global Dividend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Virtus WMC International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus WMC International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Virtus WMC is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Altrius Global and Virtus WMC

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

The idea behind Altrius Global Dividend and Virtus WMC International 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.