Correlation Between Virtus Dfa and Artisan Value

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

By analyzing existing cross correlation between Virtus Dfa 2040 and Artisan Value Fund, you can compare the effects of market volatilities on Virtus Dfa and Artisan Value 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 Dfa with a short position of Artisan Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Dfa and Artisan Value.

Diversification Opportunities for Virtus Dfa and Artisan Value

0.89

Correlation Coefficient

Virtus Dfa  Artisan Value

Very poor diversification

The 3 months correlation between Virtus and Artisan is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Dfa 2040 and Artisan Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Value and Virtus Dfa 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 Dfa 2040 are associated (or correlated) with Artisan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Value has no effect on the direction of Virtus Dfa i.e., Virtus Dfa and Artisan Value go up and down completely randomly.

Pair Corralation between Virtus Dfa and Artisan Value

Assuming the 90 days horizon Virtus Dfa 2040 is expected to generate 0.73 times more return on investment than Artisan Value. However, Virtus Dfa 2040 is 1.37 times less risky than Artisan Value. It trades about 0.2 of its potential returns per unit of risk. Artisan Value Fund is currently generating about 0.14 per unit of risk. If you would invest  1,157  in Virtus Dfa 2040 on September 4, 2024 and sell it today you would earn a total of  68.00  from holding Virtus Dfa 2040 or generate 5.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Virtus Dfa 2040  vs.  Artisan Value Fund

Virtus Dfa 2040

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Dfa 2040 are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Virtus Dfa is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Artisan Value

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Value Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Artisan Value 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 Dfa and Artisan Value

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

The idea behind Virtus Dfa 2040 and Artisan Value Fund 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.