Correlation Between Virtus Seix and Templeton Growth

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

Diversification Opportunities for Virtus Seix and Templeton Growth

0.4

Correlation Coefficient

Virtus Seix  Templeton Growth

Very weak diversification

The 3 months correlation between Virtus and Templeton is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Seix Government and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Growth 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 Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Virtus Seix i.e., Virtus Seix and Templeton Growth go up and down completely randomly.

Pair Corralation between Virtus Seix and Templeton Growth

Assuming the 90 days horizon Virtus Seix Government is expected to generate 0.11 times more return on investment than Templeton Growth. However, Virtus Seix Government is 9.16 times less risky than Templeton Growth. It trades about 0.23 of its potential returns per unit of risk. Templeton Growth Fund is currently generating about 0.02 per unit of risk. If you would invest  978.00  in Virtus Seix Government on December 29, 2024 and sell it today you would earn a total of  13.00  from holding Virtus Seix Government or generate 1.33% return on investment over 90 days.

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

Virtus Seix Government  vs.  Templeton Growth Fund

Virtus Seix Government

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Seix Government are ranked lower than 18 (%) 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.

Templeton Growth

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Templeton Growth Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Templeton Growth 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 Seix and Templeton Growth

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

The idea behind Virtus Seix Government and Templeton Growth 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.