Correlation Between Virtus Dfa and United Guardian

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

Diversification Opportunities for Virtus Dfa and United Guardian

-0.16

Correlation Coefficient

Virtus Dfa  United Guardian

Good diversification

The 3 months correlation between Virtus and United is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Dfa 2040 and United Guardian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Guardian 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 United Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Guardian has no effect on the direction of Virtus Dfa i.e., Virtus Dfa and United Guardian go up and down completely randomly.

Pair Corralation between Virtus Dfa and United Guardian

Assuming the 90 days horizon Virtus Dfa 2040 is expected to under-perform the United Guardian. In addition to that, Virtus Dfa is 1.61 times more volatile than United Guardian. It trades about -0.28 of its total potential returns per unit of risk. United Guardian is currently generating about 0.0 per unit of volatility. If you would invest  979.00  in United Guardian on October 4, 2024 and sell it today you would lose (3.00) from holding United Guardian or give up 0.31% of portfolio value over 90 days.

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

Virtus Dfa 2040  vs.  United Guardian

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.

United Guardian

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Guardian has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Virtus Dfa and United Guardian

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

The idea behind Virtus Dfa 2040 and United Guardian 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.