Correlation Between SPDR Barclays and Virtus Newfleet
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and Virtus Newfleet 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 SPDR Barclays and Virtus Newfleet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Short and Virtus Newfleet ABSMBS, you can compare the effects of market volatilities on SPDR Barclays and Virtus Newfleet 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 SPDR Barclays with a short position of Virtus Newfleet. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Virtus Newfleet.
Diversification Opportunities for SPDR Barclays and Virtus Newfleet
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and Virtus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Short and Virtus Newfleet ABSMBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Newfleet ABSMBS and SPDR Barclays 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 SPDR Barclays Short are associated (or correlated) with Virtus Newfleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Newfleet ABSMBS has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Virtus Newfleet go up and down completely randomly.
Pair Corralation between SPDR Barclays and Virtus Newfleet
Given the investment horizon of 90 days SPDR Barclays is expected to generate 1.25 times less return on investment than Virtus Newfleet. But when comparing it to its historical volatility, SPDR Barclays Short is 1.19 times less risky than Virtus Newfleet. It trades about 0.18 of its potential returns per unit of risk. Virtus Newfleet ABSMBS is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,137 in Virtus Newfleet ABSMBS on December 4, 2024 and sell it today you would earn a total of 317.00 from holding Virtus Newfleet ABSMBS or generate 14.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Short vs. Virtus Newfleet ABSMBS
Performance |
| Timeline |
| SPDR Barclays Short |
| Virtus Newfleet ABSMBS |
SPDR Barclays and Virtus Newfleet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Virtus Newfleet
The main advantage of trading using opposite SPDR Barclays and Virtus Newfleet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, Virtus Newfleet 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 Newfleet will offset losses from the drop in Virtus Newfleet's long position.| SPDR Barclays vs. SPDR Barclays Intermediate | ||
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| Virtus Newfleet vs. T Rowe Price |
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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