Correlation Between Virtus Kar and Precious Metals

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

By analyzing existing cross correlation between Virtus Kar Small Cap and Precious Metals And, you can compare the effects of market volatilities on Virtus Kar and Precious Metals 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 Kar with a short position of Precious Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Kar and Precious Metals.

Diversification Opportunities for Virtus Kar and Precious Metals

-0.55

Correlation Coefficient

Virtus Kar  Precious Metals

Excellent diversification

The 3 months correlation between Virtus and Precious is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Kar Small Cap and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And and Virtus Kar 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 Kar Small Cap are associated (or correlated) with Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of Virtus Kar i.e., Virtus Kar and Precious Metals go up and down completely randomly.

Pair Corralation between Virtus Kar and Precious Metals

Assuming the 90 days horizon Virtus Kar Small Cap is expected to under-perform the Precious Metals. But the mutual fund apears to be less risky and, when comparing its historical volatility, Virtus Kar Small Cap is 1.34 times less risky than Precious Metals. The mutual fund trades about -0.18 of its potential returns per unit of risk. The Precious Metals And is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  1,950  in Precious Metals And on December 20, 2024 and sell it today you would earn a total of  646.00  from holding Precious Metals And or generate 33.13% return on investment over 90 days.

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

Virtus Kar Small Cap  vs.  Precious Metals And

Virtus Kar Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus Kar Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Precious Metals And

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Precious Metals And are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Precious Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Virtus Kar and Precious Metals

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

The idea behind Virtus Kar Small Cap and Precious Metals And 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.