Correlation Between Virtus ETF and WisdomTree MidCap
Can any of the company-specific risk be diversified away by investing in both Virtus ETF and WisdomTree MidCap 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 ETF and WisdomTree MidCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus ETF Trust and WisdomTree MidCap Earnings, you can compare the effects of market volatilities on Virtus ETF and WisdomTree MidCap 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 ETF with a short position of WisdomTree MidCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus ETF and WisdomTree MidCap.
Diversification Opportunities for Virtus ETF and WisdomTree MidCap
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and WisdomTree is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Virtus ETF Trust and WisdomTree MidCap Earnings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree MidCap and Virtus ETF 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 ETF Trust are associated (or correlated) with WisdomTree MidCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree MidCap has no effect on the direction of Virtus ETF i.e., Virtus ETF and WisdomTree MidCap go up and down completely randomly.
Pair Corralation between Virtus ETF and WisdomTree MidCap
Given the investment horizon of 90 days Virtus ETF Trust is expected to generate 0.74 times more return on investment than WisdomTree MidCap. However, Virtus ETF Trust is 1.36 times less risky than WisdomTree MidCap. It trades about 0.1 of its potential returns per unit of risk. WisdomTree MidCap Earnings is currently generating about 0.06 per unit of risk. If you would invest 2,737 in Virtus ETF Trust on September 3, 2024 and sell it today you would earn a total of 1,322 from holding Virtus ETF Trust or generate 48.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus ETF Trust vs. WisdomTree MidCap Earnings
Performance |
| Timeline |
| Virtus ETF Trust |
| WisdomTree MidCap |
Virtus ETF and WisdomTree MidCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus ETF and WisdomTree MidCap
The main advantage of trading using opposite Virtus ETF and WisdomTree MidCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus ETF position performs unexpectedly, WisdomTree MidCap 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 WisdomTree MidCap will offset losses from the drop in WisdomTree MidCap's long position.| Virtus ETF vs. iShares Small Cap | Virtus ETF vs. Pacer Cash Cows | Virtus ETF vs. GXO Logistics | Virtus ETF vs. ProShares Pet Care |
| WisdomTree MidCap vs. Horizon Kinetics Inflation | WisdomTree MidCap vs. Virtus ETF Trust | WisdomTree MidCap vs. iShares MSCI USA | WisdomTree MidCap vs. Pacer Cash Cows |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |