Correlation Between Virtus Kar and Virtus International

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

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

Diversification Opportunities for Virtus Kar and Virtus International

-0.32

Correlation Coefficient

Virtus Kar  Virtus International

Very good diversification

The 3 months correlation between Virtus and Virtus is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Kar Mid Cap and Virtus International Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus International and Virtus Kar 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 Kar Mid Cap are associated (or correlated) with Virtus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus International has no effect on the direction of Virtus Kar i.e., Virtus Kar and Virtus International go up and down completely randomly.

Pair Corralation between Virtus Kar and Virtus International

Assuming the 90 days horizon Virtus Kar Mid Cap is expected to generate 1.22 times more return on investment than Virtus International. However, Virtus Kar is 1.22 times more volatile than Virtus International Small Cap. It trades about 0.26 of its potential returns per unit of risk. Virtus International Small Cap is currently generating about 0.01 per unit of risk. If you would invest  6,073  in Virtus Kar Mid Cap on September 4, 2024 and sell it today you would earn a total of  299.00  from holding Virtus Kar Mid Cap or generate 4.92% return on investment over 90 days.

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

Virtus Kar Mid Cap  vs.  Virtus International Small Cap

Virtus Kar Mid

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Kar Mid Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Virtus Kar may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Virtus International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus International Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Virtus International 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 Kar and Virtus International

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

The idea behind Virtus Kar Mid Cap and Virtus International Small Cap 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.

Check out your portfolio center.

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.