Correlation Between Virtus Kar and Vulcan Value

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

By analyzing existing cross correlation between Virtus Kar Small Cap and Vulcan Value Partners, you can compare the effects of market volatilities on Virtus Kar and Vulcan Value 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 Vulcan Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Kar and Vulcan Value.

Diversification Opportunities for Virtus Kar and Vulcan Value

0.46

Correlation Coefficient

Virtus Kar  Vulcan Value

Very weak diversification

The 3 months correlation between Virtus and Vulcan is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Kar Small Cap and Vulcan Value Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Value Partners 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 Small Cap are associated (or correlated) with Vulcan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Value Partners has no effect on the direction of Virtus Kar i.e., Virtus Kar and Vulcan Value go up and down completely randomly.

Pair Corralation between Virtus Kar and Vulcan Value

Assuming the 90 days horizon Virtus Kar is expected to generate 44.7 times less return on investment than Vulcan Value. But when comparing it to its historical volatility, Virtus Kar Small Cap is 1.02 times less risky than Vulcan Value. It trades about 0.0 of its potential returns per unit of risk. Vulcan Value Partners is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,136  in Vulcan Value Partners on May 4, 2025 and sell it today you would earn a total of  85.00  from holding Vulcan Value Partners or generate 7.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Virtus Kar Small Cap  vs.  Vulcan Value Partners

Virtus Kar Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus Kar Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Virtus Kar is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vulcan Value Partners

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vulcan Value Partners are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vulcan Value may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Virtus Kar and Vulcan Value

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

The idea behind Virtus Kar Small Cap and Vulcan Value Partners 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.