Correlation Between Virtus Multi and Global Bond

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

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

Diversification Opportunities for Virtus Multi and Global Bond

0.35

Correlation Coefficient

Virtus Multi  Global Bond

Weak diversification

The 3 months correlation between Virtus and Global is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Sector Short and Global Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Bond Fund and Virtus Multi 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 Sector Short are associated (or correlated) with Global Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Bond Fund has no effect on the direction of Virtus Multi i.e., Virtus Multi and Global Bond go up and down completely randomly.

Pair Corralation between Virtus Multi and Global Bond

Assuming the 90 days horizon Virtus Multi Sector Short is expected to generate 0.45 times more return on investment than Global Bond. However, Virtus Multi Sector Short is 2.21 times less risky than Global Bond. It trades about 0.0 of its potential returns per unit of risk. Global Bond Fund is currently generating about -0.2 per unit of risk. If you would invest  455.00  in Virtus Multi Sector Short on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Virtus Multi Sector Short or generate 0.0% return on investment over 90 days.

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

Virtus Multi Sector Short  vs.  Global Bond Fund

Virtus Multi Sector

Risk-Adjusted Performance

0 of 100

Very Weak

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

Global Bond Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Virtus Multi and Global Bond

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

The idea behind Virtus Multi Sector Short and Global Bond Fund 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 Global Correlations module to find global opportunities by holding instruments from different markets.