Correlation Between Virtus Seix and Astor Long/short

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

By analyzing existing cross correlation between Virtus Seix Government and Astor Longshort Fund, you can compare the effects of market volatilities on Virtus Seix and Astor Long/short 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 Seix with a short position of Astor Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Seix and Astor Long/short.

Diversification Opportunities for Virtus Seix and Astor Long/short

0.7

Correlation Coefficient

Virtus Seix  Astor Long/short

Poor diversification

The 3 months correlation between Virtus and Astor is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Seix Government and Astor Longshort Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Long/short and Virtus Seix 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 Seix Government are associated (or correlated) with Astor Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Long/short has no effect on the direction of Virtus Seix i.e., Virtus Seix and Astor Long/short go up and down completely randomly.

Pair Corralation between Virtus Seix and Astor Long/short

Assuming the 90 days horizon Virtus Seix Government is not expected to generate positive returns. However, Virtus Seix Government is 7.91 times less risky than Astor Long/short. It waists most of its returns potential to compensate for thr risk taken. Astor Long/short is generating about 0.47 per unit of risk. If you would invest  1,380  in Astor Longshort Fund on September 4, 2024 and sell it today you would earn a total of  51.00  from holding Astor Longshort Fund or generate 3.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Virtus Seix Government  vs.  Astor Longshort Fund

Virtus Seix Government

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Seix Government are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Virtus Seix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Astor Long/short

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Astor Longshort Fund are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Astor Long/short 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 Seix and Astor Long/short

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

The idea behind Virtus Seix Government and Astor Longshort 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.