Correlation Between Virtus Multi and Great West

Can any of the company-specific risk be diversified away by investing in both Virtus Multi and Great West 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 Great West 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 Great West Moderately Aggressive, you can compare the effects of market volatilities on Virtus Multi and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Multi and Great West.

Diversification Opportunities for Virtus Multi and Great West

-0.01

Correlation Coefficient

Virtus Multi  Great West

Good diversification

The 3 months correlation between Virtus and Great is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Multi Sector Short and Great West Moderately Aggressi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Moderately 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Moderately has no effect on the direction of Virtus Multi i.e., Virtus Multi and Great West go up and down completely randomly.

Pair Corralation between Virtus Multi and Great West

Assuming the 90 days horizon Virtus Multi Sector Short is expected to generate 0.29 times more return on investment than Great West. However, Virtus Multi Sector Short is 3.4 times less risky than Great West. It trades about 0.13 of its potential returns per unit of risk. Great West Moderately Aggressive is currently generating about 0.04 per unit of risk. If you would invest  404.00  in Virtus Multi Sector Short on October 24, 2024 and sell it today you would earn a total of  51.00  from holding Virtus Multi Sector Short or generate 12.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Virtus Multi Sector Short  vs.  Great West Moderately Aggressi

Virtus Multi Sector

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Multi Sector Short are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. 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.

Great West Moderately

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Moderately Aggressive are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Great West 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 Great West

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

The idea behind Virtus Multi Sector Short and Great West Moderately Aggressive 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.