Correlation Between Nasdaq-100(r) and Virtus Multi

Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Virtus Multi 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 Nasdaq-100(r) and Virtus Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Virtus Multi Strategy Target, you can compare the effects of market volatilities on Nasdaq-100(r) and Virtus Multi 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 Nasdaq-100(r) with a short position of Virtus Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Virtus Multi.

Diversification Opportunities for Nasdaq-100(r) and Virtus Multi

0.0

Correlation Coefficient

Nasdaq-100(r)  Virtus Multi

Pay attention - limited upside

The 3 months correlation between Nasdaq-100(r) and Virtus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Virtus Multi Strategy Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Multi Strategy and Nasdaq-100(r) 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 Nasdaq 100 2x Strategy are associated (or correlated) with Virtus Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Multi Strategy has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Virtus Multi go up and down completely randomly.

Pair Corralation between Nasdaq-100(r) and Virtus Multi

If you would invest  54,694  in Nasdaq 100 2x Strategy on October 24, 2024 and sell it today you would earn a total of  4,499  from holding Nasdaq 100 2x Strategy or generate 8.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Nasdaq 100 2x Strategy  vs.  Virtus Multi Strategy Target

Nasdaq 100 2x

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 2x Strategy are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nasdaq-100(r) may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Virtus Multi Strategy

Risk-Adjusted Performance

0 of 100

Modest

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

Pair Trading with Nasdaq-100(r) and Virtus Multi

The main advantage of trading using opposite Nasdaq-100(r) and Virtus Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Virtus Multi 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 Multi will offset losses from the drop in Virtus Multi's long position.

The idea behind Nasdaq 100 2x Strategy and Virtus Multi Strategy Target 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.