Correlation Between Virtus Dfa and Dine Brands

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

Diversification Opportunities for Virtus Dfa and Dine Brands

0.35

Correlation Coefficient

Virtus Dfa  Dine Brands

Weak diversification

The 3 months correlation between Virtus and Dine is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Dfa 2040 and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global 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 Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Virtus Dfa i.e., Virtus Dfa and Dine Brands go up and down completely randomly.

Pair Corralation between Virtus Dfa and Dine Brands

Assuming the 90 days horizon Virtus Dfa 2040 is expected to under-perform the Dine Brands. In addition to that, Virtus Dfa is 1.21 times more volatile than Dine Brands Global. It trades about -0.31 of its total potential returns per unit of risk. Dine Brands Global is currently generating about -0.28 per unit of volatility. If you would invest  3,401  in Dine Brands Global on October 5, 2024 and sell it today you would lose (391.00) from holding Dine Brands Global or give up 11.5% of portfolio value over 90 days.

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

Virtus Dfa 2040  vs.  Dine Brands Global

Virtus Dfa 2040

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Dfa 2040 has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Dine Brands Global

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dine Brands Global are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Dine Brands is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Virtus Dfa and Dine Brands

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

The idea behind Virtus Dfa 2040 and Dine Brands Global 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.