Correlation Between Virtus WMC and Global X
Can any of the company-specific risk be diversified away by investing in both Virtus WMC and Global X 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 WMC and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus WMC International and Global X MSCI, you can compare the effects of market volatilities on Virtus WMC and Global X 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 WMC with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus WMC and Global X.
Diversification Opportunities for Virtus WMC and Global X
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and Global is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Virtus WMC International and Global X MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X MSCI and Virtus WMC 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 WMC International are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X MSCI has no effect on the direction of Virtus WMC i.e., Virtus WMC and Global X go up and down completely randomly.
Pair Corralation between Virtus WMC and Global X
Given the investment horizon of 90 days Virtus WMC International is expected to generate 0.78 times more return on investment than Global X. However, Virtus WMC International is 1.28 times less risky than Global X. It trades about -0.14 of its potential returns per unit of risk. Global X MSCI is currently generating about -0.11 per unit of risk. If you would invest 2,787 in Virtus WMC International on August 24, 2024 and sell it today you would lose (67.00) from holding Virtus WMC International or give up 2.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus WMC International vs. Global X MSCI
Performance |
| Timeline |
| Virtus WMC International |
| Global X MSCI |
Virtus WMC and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus WMC and Global X
The main advantage of trading using opposite Virtus WMC and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus WMC position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Virtus WMC vs. Franklin Templeton ETF | Virtus WMC vs. Altrius Global Dividend | Virtus WMC vs. Invesco Exchange Traded | Virtus WMC vs. Franklin International Core |
| Global X vs. Dimensional Targeted Value | Global X vs. Dimensional Small Cap | Global X vs. Dimensional Marketwide Value | Global X vs. Dimensional Core Equity |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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