Correlation Between Virtus Newfleet and Valued Advisers

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

By analyzing existing cross correlation between Virtus Newfleet ABSMBS and Valued Advisers Trust, you can compare the effects of market volatilities on Virtus Newfleet and Valued Advisers 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 Newfleet with a short position of Valued Advisers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Newfleet and Valued Advisers.

Diversification Opportunities for Virtus Newfleet and Valued Advisers

0.74

Correlation Coefficient

Virtus Newfleet  Valued Advisers

Poor diversification

The 3 months correlation between Virtus and Valued is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Newfleet ABSMBS and Valued Advisers Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valued Advisers Trust and Virtus Newfleet 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 Newfleet ABSMBS are associated (or correlated) with Valued Advisers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valued Advisers Trust has no effect on the direction of Virtus Newfleet i.e., Virtus Newfleet and Valued Advisers go up and down completely randomly.

Pair Corralation between Virtus Newfleet and Valued Advisers

Given the investment horizon of 90 days Virtus Newfleet ABSMBS is expected to generate 0.87 times more return on investment than Valued Advisers. However, Virtus Newfleet ABSMBS is 1.15 times less risky than Valued Advisers. It trades about 0.11 of its potential returns per unit of risk. Valued Advisers Trust is currently generating about 0.07 per unit of risk. If you would invest  2,395  in Virtus Newfleet ABSMBS on December 26, 2024 and sell it today you would earn a total of  38.00  from holding Virtus Newfleet ABSMBS or generate 1.59% return on investment over 90 days.

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

Virtus Newfleet ABSMBS  vs.  Valued Advisers Trust

Virtus Newfleet ABSMBS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Newfleet ABSMBS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, Virtus Newfleet is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Valued Advisers Trust

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Valued Advisers Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Valued Advisers is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Virtus Newfleet and Valued Advisers

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

The idea behind Virtus Newfleet ABSMBS and Valued Advisers Trust 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..