Correlation Between Virtus Bond and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Virtus Bond and Vanguard Total 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 Bond and Vanguard Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Bond Fund and Vanguard Total Stock, you can compare the effects of market volatilities on Virtus Bond and Vanguard Total 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 Bond with a short position of Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Bond and Vanguard Total.
Diversification Opportunities for Virtus Bond and Vanguard Total
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtus and Vanguard is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Bond Fund and Vanguard Total Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Stock and Virtus Bond 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 Bond Fund are associated (or correlated) with Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Stock has no effect on the direction of Virtus Bond i.e., Virtus Bond and Vanguard Total go up and down completely randomly.
Pair Corralation between Virtus Bond and Vanguard Total
Assuming the 90 days horizon Virtus Bond Fund is expected to generate 0.47 times more return on investment than Vanguard Total. However, Virtus Bond Fund is 2.13 times less risky than Vanguard Total. It trades about -0.23 of its potential returns per unit of risk. Vanguard Total Stock is currently generating about -0.27 per unit of risk. If you would invest 999.00 in Virtus Bond Fund on January 24, 2024 and sell it today you would lose (16.00) from holding Virtus Bond Fund or give up 1.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Virtus Bond Fund vs. Vanguard Total Stock
Performance |
Timeline |
Virtus Bond Fund |
Vanguard Total Stock |
Virtus Bond and Vanguard Total Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Virtus Bond and Vanguard Total
The main advantage of trading using opposite Virtus Bond and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Bond position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total's long position.Virtus Bond vs. Virtus Multi Strategy Target | Virtus Bond vs. Virtus Multi Sector Short | Virtus Bond vs. Ridgeworth Seix High | Virtus Bond vs. Ridgeworth Innovative Growth |
Vanguard Total vs. Vanguard Mid Cap Index | Vanguard Total vs. Vanguard Small Cap Index | Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Total International |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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