Correlation Between Virtus Dividend and Bimini Capital

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

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

Diversification Opportunities for Virtus Dividend and Bimini Capital

-0.44

Correlation Coefficient

Virtus Dividend  Bimini Capital

Very good diversification

The 3 months correlation between Virtus and Bimini is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Dividend Interest and Bimini Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bimini Capital Management and Virtus Dividend 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 Virtus Dividend Interest are associated (or correlated) with Bimini Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bimini Capital Management has no effect on the direction of Virtus Dividend i.e., Virtus Dividend and Bimini Capital go up and down completely randomly.

Pair Corralation between Virtus Dividend and Bimini Capital

Considering the 90-day investment horizon Virtus Dividend Interest is expected to under-perform the Bimini Capital. But the fund apears to be less risky and, when comparing its historical volatility, Virtus Dividend Interest is 7.6 times less risky than Bimini Capital. The fund trades about -0.05 of its potential returns per unit of risk. The Bimini Capital Management is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  102.00  in Bimini Capital Management on December 28, 2024 and sell it today you would earn a total of  33.00  from holding Bimini Capital Management or generate 32.35% return on investment over 90 days.

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

Virtus Dividend Interest  vs.  Bimini Capital Management

Virtus Dividend Interest

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus Dividend Interest has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady technical and fundamental indicators, Virtus Dividend is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Bimini Capital Management

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bimini Capital Management are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Bimini Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Virtus Dividend and Bimini Capital

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

The idea behind Virtus Dividend Interest and Bimini Capital Management 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..