Correlation Between Virtus Multi-strategy and Artisan Global

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

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

Diversification Opportunities for Virtus Multi-strategy and Artisan Global

0.24

Correlation Coefficient

Virtus Multi-strategy  Artisan Global

Modest diversification

The 3 months correlation between Virtus and Artisan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Strategy Target and Artisan Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Global Oppor and Virtus Multi-strategy 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 Multi Strategy Target are associated (or correlated) with Artisan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Global Oppor has no effect on the direction of Virtus Multi-strategy i.e., Virtus Multi-strategy and Artisan Global go up and down completely randomly.

Pair Corralation between Virtus Multi-strategy and Artisan Global

Assuming the 90 days horizon Virtus Multi Strategy Target is expected to generate 0.06 times more return on investment than Artisan Global. However, Virtus Multi Strategy Target is 15.78 times less risky than Artisan Global. It trades about -0.33 of its potential returns per unit of risk. Artisan Global Opportunities is currently generating about -0.26 per unit of risk. If you would invest  1,820  in Virtus Multi Strategy Target on October 10, 2024 and sell it today you would lose (20.00) from holding Virtus Multi Strategy Target or give up 1.1% of portfolio value over 90 days.

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

Virtus Multi Strategy Target  vs.  Artisan Global Opportunities

Virtus Multi Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Artisan Global Oppor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan Global Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 Multi-strategy and Artisan Global

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

The idea behind Virtus Multi Strategy Target and Artisan Global Opportunities 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.