Correlation Between Strategy Shares and Virtus Private

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

By analyzing existing cross correlation between Strategy Shares and Virtus Private Credit, you can compare the effects of market volatilities on Strategy Shares and Virtus Private 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 Strategy Shares with a short position of Virtus Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategy Shares and Virtus Private.

Diversification Opportunities for Strategy Shares and Virtus Private

-0.06

Correlation Coefficient

Strategy Shares  Virtus Private

Good diversification

The 3 months correlation between Strategy and Virtus is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Strategy Shares and Virtus Private Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Private Credit and Strategy Shares 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 Strategy Shares are associated (or correlated) with Virtus Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Private Credit has no effect on the direction of Strategy Shares i.e., Strategy Shares and Virtus Private go up and down completely randomly.

Pair Corralation between Strategy Shares and Virtus Private

Given the investment horizon of 90 days Strategy Shares is expected to under-perform the Virtus Private. But the etf apears to be less risky and, when comparing its historical volatility, Strategy Shares is 2.26 times less risky than Virtus Private. The etf trades about -0.1 of its potential returns per unit of risk. The Virtus Private Credit is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,153  in Virtus Private Credit on September 22, 2024 and sell it today you would earn a total of  72.00  from holding Virtus Private Credit or generate 3.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Strategy Shares   vs.  Virtus Private Credit

Strategy Shares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strategy Shares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Strategy Shares is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Virtus Private Credit

Risk-Adjusted Performance

8 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Private Credit are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Virtus Private is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Strategy Shares and Virtus Private

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

The idea behind Strategy Shares and Virtus Private Credit 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.