Correlation Between Virtus Kar and Virtus Global

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

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

Diversification Opportunities for Virtus Kar and Virtus Global

0.0

Correlation Coefficient

Virtus Kar  Virtus Global

Pay attention - limited upside

The 3 months correlation between Virtus and Virtus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Kar Small Cap and Virtus Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Global Opport and Virtus Kar 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 Kar Small Cap are associated (or correlated) with Virtus Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Global Opport has no effect on the direction of Virtus Kar i.e., Virtus Kar and Virtus Global go up and down completely randomly.

Pair Corralation between Virtus Kar and Virtus Global

Assuming the 90 days horizon Virtus Kar is expected to generate 14.64 times less return on investment than Virtus Global. In addition to that, Virtus Kar is 1.92 times more volatile than Virtus Global Opportunities. It trades about 0.0 of its total potential returns per unit of risk. Virtus Global Opportunities is currently generating about 0.08 per unit of volatility. If you would invest  1,411  in Virtus Global Opportunities on October 23, 2024 and sell it today you would earn a total of  238.00  from holding Virtus Global Opportunities or generate 16.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	57.49%
Values	Daily Returns

Virtus Kar Small Cap  vs.  Virtus Global Opportunities

Virtus Kar Small

Risk-Adjusted Performance

0 of 100

Very Weak

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

Virtus Global Opport

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Global Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Virtus Global 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 Kar and Virtus Global

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

The idea behind Virtus Kar Small Cap and Virtus Global Opportunities 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.