Correlation Between Virtus Real and Eic Value

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

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

Diversification Opportunities for Virtus Real and Eic Value

0.74

Correlation Coefficient

Virtus Real  Eic Value

Poor diversification

The 3 months correlation between Virtus and Eic is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Real Estate and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Virtus Real 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 Real Estate are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Virtus Real i.e., Virtus Real and Eic Value go up and down completely randomly.

Pair Corralation between Virtus Real and Eic Value

Assuming the 90 days horizon Virtus Real Estate is expected to under-perform the Eic Value. In addition to that, Virtus Real is 2.83 times more volatile than Eic Value Fund. It trades about -0.31 of its total potential returns per unit of risk. Eic Value Fund is currently generating about -0.27 per unit of volatility. If you would invest  1,753  in Eic Value Fund on October 3, 2024 and sell it today you would lose (71.00) from holding Eic Value Fund or give up 4.05% of portfolio value over 90 days.

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

Virtus Real Estate  vs.  Eic Value Fund

Virtus Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Eic Value Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eic Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Eic Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Virtus Real and Eic Value

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

The idea behind Virtus Real Estate and Eic Value Fund 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.