Correlation Between Transamerica Emerging and Virtus Kar

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

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

Diversification Opportunities for Transamerica Emerging and Virtus Kar

0.0

Correlation Coefficient

Transamerica Emerging  Virtus Kar

Pay attention - limited upside

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

Pair Corralation between Transamerica Emerging and Virtus Kar

Assuming the 90 days horizon Transamerica Emerging Markets is expected to generate 0.5 times more return on investment than Virtus Kar. However, Transamerica Emerging Markets is 2.01 times less risky than Virtus Kar. It trades about 0.07 of its potential returns per unit of risk. Virtus Kar Capital is currently generating about 0.01 per unit of risk. If you would invest  701.00  in Transamerica Emerging Markets on December 3, 2024 and sell it today you would earn a total of  136.00  from holding Transamerica Emerging Markets or generate 19.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.7%
Values	Daily Returns

Transamerica Emerging Markets  vs.  Virtus Kar Capital

Transamerica Emerging

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Transamerica Emerging Markets are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, Transamerica Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Virtus Kar Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus Kar Capital 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Transamerica Emerging and Virtus Kar

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

The idea behind Transamerica Emerging Markets and Virtus Kar Capital 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.