Correlation Between Vanguard Value and Virtus

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

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

Diversification Opportunities for Vanguard Value and Virtus

-0.37

Correlation Coefficient

Vanguard Value  Virtus

Very good diversification

The 3 months correlation between Vanguard and Virtus is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Value Index and Virtus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus and Vanguard Value 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 Vanguard Value Index are associated (or correlated) with Virtus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus has no effect on the direction of Vanguard Value i.e., Vanguard Value and Virtus go up and down completely randomly.

Pair Corralation between Vanguard Value and Virtus

If you would invest  2,115  in Virtus on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Virtus or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Vanguard Value Index  vs.  Virtus

Vanguard Value Index

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Value Index has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Vanguard Value is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Virtus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Virtus is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vanguard Value and Virtus

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

The idea behind Vanguard Value Index and Virtus 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 Commodity Directory module to find actively traded commodities issued by global exchanges.