Correlation Between Virtus Newfleet and WisdomTree Trust

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

Diversification Opportunities for Virtus Newfleet and WisdomTree Trust

0.52

Correlation Coefficient

Virtus Newfleet  WisdomTree Trust

Very weak diversification

The 3 months correlation between Virtus and WisdomTree is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Newfleet ABSMBS and WisdomTree Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree 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 WisdomTree Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Trust has no effect on the direction of Virtus Newfleet i.e., Virtus Newfleet and WisdomTree Trust go up and down completely randomly.

Pair Corralation between Virtus Newfleet and WisdomTree Trust

Given the investment horizon of 90 days Virtus Newfleet ABSMBS is expected to generate 0.21 times more return on investment than WisdomTree Trust. However, Virtus Newfleet ABSMBS is 4.86 times less risky than WisdomTree Trust. It trades about 0.29 of its potential returns per unit of risk. WisdomTree Trust is currently generating about 0.02 per unit of risk. If you would invest  2,443  in Virtus Newfleet ABSMBS on May 21, 2025 and sell it today you would earn a total of  19.00  from holding Virtus Newfleet ABSMBS or generate 0.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Virtus Newfleet ABSMBS  vs.  WisdomTree Trust

Virtus Newfleet ABSMBS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Newfleet ABSMBS are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, Virtus Newfleet is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

WisdomTree Trust

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Trust are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, WisdomTree Trust is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Virtus Newfleet and WisdomTree Trust

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

The idea behind Virtus Newfleet ABSMBS and WisdomTree 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.