Correlation Between Wilmington Large-cap and Virtus Global

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

By analyzing existing cross correlation between Wilmington Large Cap Strategy and Virtus Global Real, you can compare the effects of market volatilities on Wilmington Large-cap and Virtus Global 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 Wilmington Large-cap with a short position of Virtus Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Large-cap and Virtus Global.

Diversification Opportunities for Wilmington Large-cap and Virtus Global

0.35

Correlation Coefficient

Wilmington Large-cap  Virtus Global

Weak diversification

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

Pair Corralation between Wilmington Large-cap and Virtus Global

Assuming the 90 days horizon Wilmington Large Cap Strategy is expected to under-perform the Virtus Global. In addition to that, Wilmington Large-cap is 1.15 times more volatile than Virtus Global Real. It trades about -0.08 of its total potential returns per unit of risk. Virtus Global Real is currently generating about 0.02 per unit of volatility. If you would invest  3,185  in Virtus Global Real on December 31, 2024 and sell it today you would earn a total of  36.00  from holding Virtus Global Real or generate 1.13% return on investment over 90 days.

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

Wilmington Large Cap Strategy  vs.  Virtus Global Real

Wilmington Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wilmington Large Cap Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Wilmington Large-cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Virtus Global Real

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Global Real are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Virtus Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Wilmington Large-cap and Virtus Global

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

The idea behind Wilmington Large Cap Strategy and Virtus Global Real 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.