Correlation Between Virtus Seix and Rbc China

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

By analyzing existing cross correlation between Virtus Seix Government and Rbc China Equity, you can compare the effects of market volatilities on Virtus Seix and Rbc China 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 Seix with a short position of Rbc China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Seix and Rbc China.

Diversification Opportunities for Virtus Seix and Rbc China

-0.54

Correlation Coefficient

Virtus Seix  Rbc China

Excellent diversification

The 3 months correlation between Virtus and Rbc is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Seix Government and Rbc China Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc China Equity and Virtus Seix 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 Seix Government are associated (or correlated) with Rbc China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc China Equity has no effect on the direction of Virtus Seix i.e., Virtus Seix and Rbc China go up and down completely randomly.

Pair Corralation between Virtus Seix and Rbc China

Assuming the 90 days horizon Virtus Seix Government is not expected to generate positive returns. However, Virtus Seix Government is 25.31 times less risky than Rbc China. It waists most of its returns potential to compensate for thr risk taken. Rbc China is generating about -0.5 per unit of risk. If you would invest  989.00  in Virtus Seix Government on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Virtus Seix Government or generate 0.0% return on investment over 90 days.

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

Virtus Seix Government  vs.  Rbc China Equity

Virtus Seix Government

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Seix Government are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Virtus Seix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rbc China Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbc China Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Virtus Seix and Rbc China

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

The idea behind Virtus Seix Government and Rbc China Equity 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.