Correlation Between Virtus Dividend and Platinum Asia

Can any of the company-specific risk be diversified away by investing in both Virtus Dividend and Platinum Asia 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 Platinum Asia 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 Platinum Asia Investments, you can compare the effects of market volatilities on Virtus Dividend and Platinum Asia 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 Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Dividend and Platinum Asia.

Diversification Opportunities for Virtus Dividend and Platinum Asia

0.29

Correlation Coefficient

Virtus Dividend  Platinum Asia

Modest diversification

The 3 months correlation between Virtus and Platinum is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Dividend Interest and Platinum Asia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia Investments 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 Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia Investments has no effect on the direction of Virtus Dividend i.e., Virtus Dividend and Platinum Asia go up and down completely randomly.

Pair Corralation between Virtus Dividend and Platinum Asia

Considering the 90-day investment horizon Virtus Dividend Interest is expected to generate 0.75 times more return on investment than Platinum Asia. However, Virtus Dividend Interest is 1.34 times less risky than Platinum Asia. It trades about 0.04 of its potential returns per unit of risk. Platinum Asia Investments is currently generating about -0.05 per unit of risk. If you would invest  1,251  in Virtus Dividend Interest on October 9, 2024 and sell it today you would earn a total of  18.00  from holding Virtus Dividend Interest or generate 1.44% return on investment over 90 days.

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

Virtus Dividend Interest  vs.  Platinum Asia Investments

Virtus Dividend Interest

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Dividend Interest are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. 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.

Platinum Asia Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Platinum Asia Investments has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly strong basic indicators, Platinum Asia is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Virtus Dividend and Platinum Asia

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

The idea behind Virtus Dividend Interest and Platinum Asia Investments 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.

Check out your portfolio center.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.