Correlation Between Vanguard Multi-sector and Virtus Emerging
Can any of the company-specific risk be diversified away by investing in both Vanguard Multi-sector and Virtus Emerging 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 Vanguard Multi-sector and Virtus Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Multi Sector Income and Virtus Emerging Markets, you can compare the effects of market volatilities on Vanguard Multi-sector and Virtus Emerging 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 Vanguard Multi-sector with a short position of Virtus Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Multi-sector and Virtus Emerging.
Diversification Opportunities for Vanguard Multi-sector and Virtus Emerging
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Virtus is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Multi Sector Income and Virtus Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Emerging Markets and Vanguard Multi-sector 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 Vanguard Multi Sector Income are associated (or correlated) with Virtus Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Emerging Markets has no effect on the direction of Vanguard Multi-sector i.e., Vanguard Multi-sector and Virtus Emerging go up and down completely randomly.
Pair Corralation between Vanguard Multi-sector and Virtus Emerging
Assuming the 90 days horizon Vanguard Multi-sector is expected to generate 2.68 times less return on investment than Virtus Emerging. But when comparing it to its historical volatility, Vanguard Multi Sector Income is 6.2 times less risky than Virtus Emerging. It trades about 0.21 of its potential returns per unit of risk. Virtus Emerging Markets is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 722.00 in Virtus Emerging Markets on September 2, 2025 and sell it today you would earn a total of 32.00 from holding Virtus Emerging Markets or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Multi Sector Income vs. Virtus Emerging Markets
Performance |
| Timeline |
| Vanguard Multi Sector |
| Virtus Emerging Markets |
Vanguard Multi-sector and Virtus Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Multi-sector and Virtus Emerging
The main advantage of trading using opposite Vanguard Multi-sector and Virtus Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Multi-sector position performs unexpectedly, Virtus Emerging 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 Emerging will offset losses from the drop in Virtus Emerging's long position.| Vanguard Multi-sector vs. Lord Abbett Convertible | Vanguard Multi-sector vs. Virtus Convertible | Vanguard Multi-sector vs. Calamos Dynamic Convertible | Vanguard Multi-sector vs. Advent Claymore Convertible |
| Virtus Emerging vs. Vanguard Multi Sector Income | Virtus Emerging vs. Virtus Multi Sector Short | Virtus Emerging vs. Ridgeworth Seix High | Virtus Emerging vs. Ridgeworth Innovative Growth |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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