Correlation Between Virtus Real and BFIT

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

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

Diversification Opportunities for Virtus Real and BFIT

0.0

Correlation Coefficient

Virtus Real  BFIT

Pay attention - limited upside

The 3 months correlation between Virtus and BFIT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Real Asset and BFIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BFIT and Virtus Real 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 Real Asset are associated (or correlated) with BFIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BFIT has no effect on the direction of Virtus Real i.e., Virtus Real and BFIT go up and down completely randomly.

Pair Corralation between Virtus Real and BFIT

If you would invest  2,227  in Virtus Real Asset on December 27, 2024 and sell it today you would earn a total of  117.00  from holding Virtus Real Asset or generate 5.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Virtus Real Asset  vs.  BFIT

Virtus Real Asset

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Real Asset are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Virtus Real is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

BFIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days BFIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, BFIT is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Virtus Real and BFIT

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

The idea behind Virtus Real Asset and BFIT 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.