Correlation Between Strategic Advisers and Virtus Ceredex

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

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

Diversification Opportunities for Strategic Advisers and Virtus Ceredex

-0.17

Correlation Coefficient

Strategic Advisers  Virtus Ceredex

Good diversification

The 3 months correlation between Strategic and Virtus is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Advisers Income and Virtus Ceredex Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Ceredex Small and Strategic Advisers 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 Strategic Advisers Income are associated (or correlated) with Virtus Ceredex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Ceredex Small has no effect on the direction of Strategic Advisers i.e., Strategic Advisers and Virtus Ceredex go up and down completely randomly.

Pair Corralation between Strategic Advisers and Virtus Ceredex

Assuming the 90 days horizon Strategic Advisers Income is expected to generate 0.11 times more return on investment than Virtus Ceredex. However, Strategic Advisers Income is 8.76 times less risky than Virtus Ceredex. It trades about 0.06 of its potential returns per unit of risk. Virtus Ceredex Small Cap is currently generating about -0.19 per unit of risk. If you would invest  873.00  in Strategic Advisers Income on December 5, 2024 and sell it today you would earn a total of  7.00  from holding Strategic Advisers Income or generate 0.8% return on investment over 90 days.

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

Strategic Advisers Income  vs.  Virtus Ceredex Small Cap

Strategic Advisers Income

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Advisers Income are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Strategic Advisers is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Virtus Ceredex Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus Ceredex Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Strategic Advisers and Virtus Ceredex

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

The idea behind Strategic Advisers Income and Virtus Ceredex Small 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..