Correlation Between WGRO and Virtus ETF

Can any of the company-specific risk be diversified away by investing in both WGRO 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 WGRO and Virtus ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WGRO and Virtus ETF Trust, you can compare the effects of market volatilities on WGRO 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 WGRO with a short position of Virtus ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of WGRO and Virtus ETF.

Diversification Opportunities for WGRO and Virtus ETF

0.83

Correlation Coefficient

WGRO  Virtus ETF

Very poor diversification

The 3 months correlation between WGRO and Virtus is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding WGRO 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 WGRO 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 WGRO 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 WGRO i.e., WGRO and Virtus ETF go up and down completely randomly.

Pair Corralation between WGRO and Virtus ETF

If you would invest  3,420  in Virtus ETF Trust on September 17, 2024 and sell it today you would earn a total of  559.00  from holding Virtus ETF Trust or generate 16.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.59%
Values	Daily Returns

WGRO  vs.  Virtus ETF Trust

WGRO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WGRO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, WGRO is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Virtus ETF Trust

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus ETF Trust are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, Virtus ETF may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with WGRO and Virtus ETF

The main advantage of trading using opposite WGRO and Virtus ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WGRO 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.

The idea behind WGRO and Virtus ETF Trust 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.