Correlation Between Muzinich Credit and Versatile Bond

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

By analyzing existing cross correlation between Muzinich Credit Opportunities and Versatile Bond Portfolio, you can compare the effects of market volatilities on Muzinich Credit and Versatile Bond 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 Muzinich Credit with a short position of Versatile Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muzinich Credit and Versatile Bond.

Diversification Opportunities for Muzinich Credit and Versatile Bond

0.99

Correlation Coefficient

Muzinich Credit  Versatile Bond

No risk reduction

The 3 months correlation between Muzinich and Versatile is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Muzinich Credit Opportunities and Versatile Bond Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Versatile Bond Portfolio and Muzinich Credit 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 Muzinich Credit Opportunities are associated (or correlated) with Versatile Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Versatile Bond Portfolio has no effect on the direction of Muzinich Credit i.e., Muzinich Credit and Versatile Bond go up and down completely randomly.

Pair Corralation between Muzinich Credit and Versatile Bond

Assuming the 90 days horizon Muzinich Credit Opportunities is expected to generate 1.35 times more return on investment than Versatile Bond. However, Muzinich Credit is 1.35 times more volatile than Versatile Bond Portfolio. It trades about 0.31 of its potential returns per unit of risk. Versatile Bond Portfolio is currently generating about 0.34 per unit of risk. If you would invest  976.00  in Muzinich Credit Opportunities on July 27, 2025 and sell it today you would earn a total of  27.00  from holding Muzinich Credit Opportunities or generate 2.77% return on investment over 90 days.

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

Muzinich Credit Opportunities  vs.  Versatile Bond Portfolio

Muzinich Credit Oppo

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Muzinich Credit Opportunities are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Muzinich Credit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Versatile Bond Portfolio

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Versatile Bond Portfolio are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Versatile Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Muzinich Credit and Versatile Bond

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

The idea behind Muzinich Credit Opportunities and Versatile Bond Portfolio 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.