Correlation Between Virtus Private and Starboard Investment

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

By analyzing existing cross correlation between Virtus Private Credit and Starboard Investment Trust, you can compare the effects of market volatilities on Virtus Private and Starboard Investment 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 Private with a short position of Starboard Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Private and Starboard Investment.

Diversification Opportunities for Virtus Private and Starboard Investment

0.36

Correlation Coefficient

Virtus Private  Starboard Investment

Weak diversification

The 3 months correlation between Virtus and Starboard is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Private Credit and Starboard Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starboard Investment and Virtus Private 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 Private Credit are associated (or correlated) with Starboard Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starboard Investment has no effect on the direction of Virtus Private i.e., Virtus Private and Starboard Investment go up and down completely randomly.

Pair Corralation between Virtus Private and Starboard Investment

Considering the 90-day investment horizon Virtus Private Credit is expected to generate 1.4 times more return on investment than Starboard Investment. However, Virtus Private is 1.4 times more volatile than Starboard Investment Trust. It trades about 0.18 of its potential returns per unit of risk. Starboard Investment Trust is currently generating about -0.09 per unit of risk. If you would invest  2,153  in Virtus Private Credit on September 22, 2024 and sell it today you would earn a total of  72.00  from holding Virtus Private Credit or generate 3.34% return on investment over 90 days.

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

Virtus Private Credit  vs.  Starboard Investment Trust

Virtus Private Credit

Risk-Adjusted Performance

8 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Private Credit are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Virtus Private is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Starboard Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Starboard Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Starboard Investment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Virtus Private and Starboard Investment

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

The idea behind Virtus Private Credit and Starboard Investment Trust 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.

Check out your portfolio center.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.