Correlation Between Virtus Real and Smallcap Fund

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

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

Diversification Opportunities for Virtus Real and Smallcap Fund

0.16

Correlation Coefficient

Virtus Real  Smallcap Fund

Average diversification

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

Pair Corralation between Virtus Real and Smallcap Fund

Assuming the 90 days horizon Virtus Real Estate is expected to generate 0.87 times more return on investment than Smallcap Fund. However, Virtus Real Estate is 1.14 times less risky than Smallcap Fund. It trades about 0.05 of its potential returns per unit of risk. Smallcap Fund Fka is currently generating about 0.03 per unit of risk. If you would invest  1,762  in Virtus Real Estate on September 12, 2024 and sell it today you would earn a total of  339.00  from holding Virtus Real Estate or generate 19.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.44%
Values	Daily Returns

Virtus Real Estate  vs.  Smallcap Fund Fka

Virtus Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Smallcap Fund Fka

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smallcap Fund Fka has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Smallcap Fund 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 Real and Smallcap Fund

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

The idea behind Virtus Real Estate and Smallcap Fund Fka 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.