Correlation Between Virtus High and Rmb Fund

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

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

Diversification Opportunities for Virtus High and Rmb Fund

0.39

Correlation Coefficient

Virtus High  Rmb Fund

Weak diversification

The 3 months correlation between Virtus and Rmb is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Virtus High Yield and Rmb Fund I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmb Fund I and Virtus High 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 High Yield are associated (or correlated) with Rmb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmb Fund I has no effect on the direction of Virtus High i.e., Virtus High and Rmb Fund go up and down completely randomly.

Pair Corralation between Virtus High and Rmb Fund

Assuming the 90 days horizon Virtus High Yield is expected to generate 0.11 times more return on investment than Rmb Fund. However, Virtus High Yield is 9.02 times less risky than Rmb Fund. It trades about -0.16 of its potential returns per unit of risk. Rmb Fund I is currently generating about -0.29 per unit of risk. If you would invest  390.00  in Virtus High Yield on October 9, 2024 and sell it today you would lose (2.00) from holding Virtus High Yield or give up 0.51% of portfolio value over 90 days.

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

Virtus High Yield  vs.  Rmb Fund I

Virtus High Yield

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus High Yield are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Virtus High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rmb Fund I

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rmb Fund I has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Rmb Fund 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 High and Rmb Fund

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

The idea behind Virtus High Yield and Rmb Fund I 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.