Correlation Between Mast Global and Virtus Duff

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

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

Diversification Opportunities for Mast Global and Virtus Duff

0.25

Correlation Coefficient

Mast Global  Virtus Duff

Modest diversification

The 3 months correlation between Mast and Virtus is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and Virtus Duff Phelps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Duff Phelps and Mast 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 Mast Global Battery are associated (or correlated) with Virtus Duff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Duff Phelps has no effect on the direction of Mast Global i.e., Mast Global and Virtus Duff go up and down completely randomly.

Pair Corralation between Mast Global and Virtus Duff

Allowing for the 90-day total investment horizon Mast Global is expected to generate 1.16 times less return on investment than Virtus Duff. But when comparing it to its historical volatility, Mast Global Battery is 1.13 times less risky than Virtus Duff. It trades about 0.05 of its potential returns per unit of risk. Virtus Duff Phelps is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,663  in Virtus Duff Phelps on December 19, 2024 and sell it today you would earn a total of  53.00  from holding Virtus Duff Phelps or generate 3.19% return on investment over 90 days.

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

Mast Global Battery  vs.  Virtus Duff Phelps

Mast Global Battery

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mast Global Battery are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Mast Global is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Virtus Duff Phelps

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Duff Phelps are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, Virtus Duff is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mast Global and Virtus Duff

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

The idea behind Mast Global Battery and Virtus Duff Phelps 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.