Correlation Between Virtus Newfleet and Virtus ETF
Can any of the company-specific risk be diversified away by investing in both Virtus Newfleet and Virtus ETF 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 Newfleet and Virtus ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Newfleet ABSMBS and Virtus ETF Trust, you can compare the effects of market volatilities on Virtus Newfleet and Virtus ETF 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 Newfleet with a short position of Virtus ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Newfleet and Virtus ETF.
Diversification Opportunities for Virtus Newfleet and Virtus ETF
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and Virtus is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Newfleet ABSMBS and Virtus ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus ETF Trust and Virtus Newfleet 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 Newfleet ABSMBS are associated (or correlated) with Virtus ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus ETF Trust has no effect on the direction of Virtus Newfleet i.e., Virtus Newfleet and Virtus ETF go up and down completely randomly.
Pair Corralation between Virtus Newfleet and Virtus ETF
Given the investment horizon of 90 days Virtus Newfleet ABSMBS is expected to generate about the same return on investment as Virtus ETF Trust. However, Virtus Newfleet is 4.04 times more volatile than Virtus ETF Trust. It trades about 0.07 of its potential returns per unit of risk. Virtus ETF Trust is currently producing about 0.3 per unit of risk. If you would invest 2,391 in Virtus ETF Trust on November 18, 2024 and sell it today you would earn a total of 9.00 from holding Virtus ETF Trust or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Newfleet ABSMBS vs. Virtus ETF Trust
Performance |
| Timeline |
| Virtus Newfleet ABSMBS |
| Virtus ETF Trust |
Virtus Newfleet and Virtus ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Newfleet and Virtus ETF
The main advantage of trading using opposite Virtus Newfleet and Virtus ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Newfleet position performs unexpectedly, Virtus ETF 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 ETF will offset losses from the drop in Virtus ETF's long position.| Virtus Newfleet vs. Virtus ETF Trust | Virtus Newfleet vs. Virtus Newfleet Multi Sector | Virtus Newfleet vs. Virtus WMC International | Virtus Newfleet vs. T Rowe Price |
| Virtus ETF vs. Franklin Liberty Senior | Virtus ETF vs. Virtus Newfleet Multi Sector | Virtus ETF vs. Pacer Pacific Asset | Virtus ETF vs. JPMorgan USD Emerging |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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