Correlation Between Scharf Fund and Virtus Allianzgi

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

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

Diversification Opportunities for Scharf Fund and Virtus Allianzgi

0.9

Correlation Coefficient

Scharf Fund  Virtus Allianzgi

Almost no diversification

The 3 months correlation between Scharf and Virtus is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Virtus Allianzgi Artificial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Allianzgi Art and Scharf Fund 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 Scharf Fund Retail are associated (or correlated) with Virtus Allianzgi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Allianzgi Art has no effect on the direction of Scharf Fund i.e., Scharf Fund and Virtus Allianzgi go up and down completely randomly.

Pair Corralation between Scharf Fund and Virtus Allianzgi

Assuming the 90 days horizon Scharf Fund is expected to generate 3.3 times less return on investment than Virtus Allianzgi. But when comparing it to its historical volatility, Scharf Fund Retail is 1.71 times less risky than Virtus Allianzgi. It trades about 0.14 of its potential returns per unit of risk. Virtus Allianzgi Artificial is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  2,080  in Virtus Allianzgi Artificial on September 2, 2024 and sell it today you would earn a total of  377.00  from holding Virtus Allianzgi Artificial or generate 18.13% return on investment over 90 days.

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

Scharf Fund Retail  vs.  Virtus Allianzgi Artificial

Scharf Fund Retail

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Scharf Fund Retail are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Scharf Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Virtus Allianzgi Art

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Allianzgi Artificial are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak forward indicators, Virtus Allianzgi displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scharf Fund and Virtus Allianzgi

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

The idea behind Scharf Fund Retail and Virtus Allianzgi Artificial 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.