Correlation Between Virtus Nfj and Pacific Funds

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

By analyzing existing cross correlation between Virtus Nfj Large Cap and Pacific Funds Short, you can compare the effects of market volatilities on Virtus Nfj and Pacific Funds 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 Nfj with a short position of Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Nfj and Pacific Funds.

Diversification Opportunities for Virtus Nfj and Pacific Funds

0.01

Correlation Coefficient

Virtus Nfj  Pacific Funds

Significant diversification

The 3 months correlation between Virtus and Pacific is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Nfj Large Cap and Pacific Funds Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Short and Virtus Nfj 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 Nfj Large Cap are associated (or correlated) with Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Short has no effect on the direction of Virtus Nfj i.e., Virtus Nfj and Pacific Funds go up and down completely randomly.

Pair Corralation between Virtus Nfj and Pacific Funds

Assuming the 90 days horizon Virtus Nfj Large Cap is expected to generate 6.77 times more return on investment than Pacific Funds. However, Virtus Nfj is 6.77 times more volatile than Pacific Funds Short. It trades about 0.07 of its potential returns per unit of risk. Pacific Funds Short is currently generating about 0.18 per unit of risk. If you would invest  2,192  in Virtus Nfj Large Cap on September 12, 2024 and sell it today you would earn a total of  725.00  from holding Virtus Nfj Large Cap or generate 33.07% return on investment over 90 days.

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

Virtus Nfj Large Cap  vs.  Pacific Funds Short

Virtus Nfj Large

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Nfj Large Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Virtus Nfj is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pacific Funds Short

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Funds Short are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pacific Funds 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 Nfj and Pacific Funds

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

The idea behind Virtus Nfj Large Cap and Pacific Funds Short 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.