Correlation Between Virtus Dividend and Stock Index

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

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

Diversification Opportunities for Virtus Dividend and Stock Index

0.75

Correlation Coefficient

Virtus Dividend  Stock Index

Poor diversification

The 3 months correlation between Virtus and Stock is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Dividend Interest and Stock Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stock Index Fund and Virtus Dividend 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 Dividend Interest are associated (or correlated) with Stock Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stock Index Fund has no effect on the direction of Virtus Dividend i.e., Virtus Dividend and Stock Index go up and down completely randomly.

Pair Corralation between Virtus Dividend and Stock Index

Considering the 90-day investment horizon Virtus Dividend Interest is expected to under-perform the Stock Index. But the fund apears to be less risky and, when comparing its historical volatility, Virtus Dividend Interest is 1.07 times less risky than Stock Index. The fund trades about -0.05 of its potential returns per unit of risk. The Stock Index Fund is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4,157  in Stock Index Fund on September 19, 2024 and sell it today you would earn a total of  215.00  from holding Stock Index Fund or generate 5.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Virtus Dividend Interest  vs.  Stock Index Fund

Virtus Dividend Interest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Dividend Interest has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady technical and fundamental indicators, Virtus Dividend is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Stock Index Fund

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stock Index Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Stock Index 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 Dividend and Stock Index

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

The idea behind Virtus Dividend Interest and Stock Index Fund 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.