Correlation Between Virtus Real and Ultrabear Profund

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

Diversification Opportunities for Virtus Real and Ultrabear Profund

-0.17

Correlation Coefficient

Virtus Real  Ultrabear Profund

Good diversification

The 3 months correlation between Virtus and Ultrabear is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Real Estate and Ultrabear Profund Ultrabear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrabear Profund 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 Ultrabear Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrabear Profund has no effect on the direction of Virtus Real i.e., Virtus Real and Ultrabear Profund go up and down completely randomly.

Pair Corralation between Virtus Real and Ultrabear Profund

Assuming the 90 days horizon Virtus Real Estate is expected to under-perform the Ultrabear Profund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Virtus Real Estate is 1.07 times less risky than Ultrabear Profund. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Ultrabear Profund Ultrabear is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,069  in Ultrabear Profund Ultrabear on September 23, 2024 and sell it today you would lose (35.00) from holding Ultrabear Profund Ultrabear or give up 3.27% of portfolio value over 90 days.

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

Virtus Real Estate  vs.  Ultrabear Profund Ultrabear

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 unfluctuating performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Ultrabear Profund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ultrabear Profund Ultrabear has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Ultrabear Profund 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 Ultrabear Profund

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

The idea behind Virtus Real Estate and Ultrabear Profund Ultrabear 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.