Correlation Between Virtus ETF and SPDR Bloomberg

Can any of the company-specific risk be diversified away by investing in both Virtus ETF and SPDR Bloomberg 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 SPDR Bloomberg 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 SPDR Bloomberg Investment, you can compare the effects of market volatilities on Virtus ETF and SPDR Bloomberg 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 SPDR Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus ETF and SPDR Bloomberg.

Diversification Opportunities for Virtus ETF and SPDR Bloomberg

-0.17

Correlation Coefficient

Virtus ETF  SPDR Bloomberg

Good diversification

The 3 months correlation between Virtus and SPDR is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Virtus ETF Trust and SPDR Bloomberg Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Bloomberg Investment 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 SPDR Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Bloomberg Investment has no effect on the direction of Virtus ETF i.e., Virtus ETF and SPDR Bloomberg go up and down completely randomly.

Pair Corralation between Virtus ETF and SPDR Bloomberg

Given the investment horizon of 90 days Virtus ETF Trust is expected to generate 6401.17 times more return on investment than SPDR Bloomberg. However, Virtus ETF is 6401.17 times more volatile than SPDR Bloomberg Investment. It trades about 0.32 of its potential returns per unit of risk. SPDR Bloomberg Investment is currently generating about 0.46 per unit of risk. If you would invest  0.00  in Virtus ETF Trust on September 15, 2024 and sell it today you would earn a total of  2,509  from holding Virtus ETF Trust or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	15.63%
Values	Daily Returns

Virtus ETF Trust  vs.  SPDR Bloomberg Investment

Virtus ETF Trust

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus ETF Trust are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Virtus ETF displayed solid returns over the last few months and may actually be approaching a breakup point.

SPDR Bloomberg Investment

Risk-Adjusted Performance

35 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg Investment are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, SPDR Bloomberg is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Virtus ETF and SPDR Bloomberg

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

The idea behind Virtus ETF Trust and SPDR Bloomberg Investment 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.