Correlation Between Virtus Global and BlackRock Core

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

By analyzing existing cross correlation between Virtus Global Multi and BlackRock Core Bond, you can compare the effects of market volatilities on Virtus Global and BlackRock Core 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 Global with a short position of BlackRock Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Global and BlackRock Core.

Diversification Opportunities for Virtus Global and BlackRock Core

0.72

Correlation Coefficient

Virtus Global  BlackRock Core

Poor diversification

The 3 months correlation between Virtus and BlackRock is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Global Multi and BlackRock Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Core Bond and Virtus Global 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 Global Multi are associated (or correlated) with BlackRock Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Core Bond has no effect on the direction of Virtus Global i.e., Virtus Global and BlackRock Core go up and down completely randomly.

Pair Corralation between Virtus Global and BlackRock Core

Considering the 90-day investment horizon Virtus Global Multi is expected to generate 0.71 times more return on investment than BlackRock Core. However, Virtus Global Multi is 1.41 times less risky than BlackRock Core. It trades about 0.02 of its potential returns per unit of risk. BlackRock Core Bond is currently generating about -0.06 per unit of risk. If you would invest  781.00  in Virtus Global Multi on November 28, 2024 and sell it today you would earn a total of  5.00  from holding Virtus Global Multi or generate 0.64% return on investment over 90 days.

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

Virtus Global Multi  vs.  BlackRock Core Bond

Virtus Global Multi

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Global Multi are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Virtus Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

BlackRock Core Bond

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock Core Bond has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, BlackRock Core is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Virtus Global and BlackRock Core

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

The idea behind Virtus Global Multi and BlackRock Core Bond 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.