Correlation Between Virtus Rampart and Dunham Real

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

By analyzing existing cross correlation between Virtus Rampart Enhanced and Dunham Real Estate, you can compare the effects of market volatilities on Virtus Rampart and Dunham Real 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 Rampart with a short position of Dunham Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Rampart and Dunham Real.

Diversification Opportunities for Virtus Rampart and Dunham Real

0.89

Correlation Coefficient

Virtus Rampart  Dunham Real

Very poor diversification

The 3 months correlation between Virtus and Dunham is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Rampart Enhanced and Dunham Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Real Estate and Virtus Rampart 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 Rampart Enhanced are associated (or correlated) with Dunham Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Real Estate has no effect on the direction of Virtus Rampart i.e., Virtus Rampart and Dunham Real go up and down completely randomly.

Pair Corralation between Virtus Rampart and Dunham Real

Assuming the 90 days horizon Virtus Rampart Enhanced is expected to under-perform the Dunham Real. In addition to that, Virtus Rampart is 1.15 times more volatile than Dunham Real Estate. It trades about -0.29 of its total potential returns per unit of risk. Dunham Real Estate is currently generating about -0.26 per unit of volatility. If you would invest  1,509  in Dunham Real Estate on October 4, 2024 and sell it today you would lose (94.00) from holding Dunham Real Estate or give up 6.23% of portfolio value over 90 days.

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

Virtus Rampart Enhanced  vs.  Dunham Real Estate

Virtus Rampart Enhanced

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Rampart Enhanced has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Virtus Rampart is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dunham Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dunham Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Virtus Rampart and Dunham Real

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

The idea behind Virtus Rampart Enhanced and Dunham Real Estate 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.