Correlation Between Virtus Private and Strategy Shares

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

Diversification Opportunities for Virtus Private and Strategy Shares

0.21

Correlation Coefficient

Virtus Private  Strategy Shares

Modest diversification

The 3 months correlation between Virtus and Strategy is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Private Credit and Strategy Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares 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 Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares has no effect on the direction of Virtus Private i.e., Virtus Private and Strategy Shares go up and down completely randomly.

Pair Corralation between Virtus Private and Strategy Shares

Considering the 90-day investment horizon Virtus Private is expected to generate 3.64 times less return on investment than Strategy Shares. In addition to that, Virtus Private is 1.44 times more volatile than Strategy Shares . It trades about 0.01 of its total potential returns per unit of risk. Strategy Shares is currently generating about 0.08 per unit of volatility. If you would invest  2,083  in Strategy Shares on December 26, 2024 and sell it today you would earn a total of  39.10  from holding Strategy Shares or generate 1.88% 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.  Strategy Shares

Virtus Private Credit

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Private Credit are ranked lower than 1 (%) 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.

Strategy Shares

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Strategy Shares are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Strategy Shares is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Virtus Private and Strategy Shares

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

The idea behind Virtus Private Credit and Strategy Shares 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.