Correlation Between Virtus Newfleet and Simplify Exchange

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

Diversification Opportunities for Virtus Newfleet and Simplify Exchange

-0.32

Correlation Coefficient

Virtus Newfleet  Simplify Exchange

Very good diversification

The 3 months correlation between Virtus and Simplify is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Newfleet ABSMBS and Simplify Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Exchange Traded 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 Simplify Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Exchange Traded has no effect on the direction of Virtus Newfleet i.e., Virtus Newfleet and Simplify Exchange go up and down completely randomly.

Pair Corralation between Virtus Newfleet and Simplify Exchange

Given the investment horizon of 90 days Virtus Newfleet ABSMBS is expected to generate 0.2 times more return on investment than Simplify Exchange. However, Virtus Newfleet ABSMBS is 5.05 times less risky than Simplify Exchange. It trades about 0.19 of its potential returns per unit of risk. Simplify Exchange Traded is currently generating about -0.01 per unit of risk. If you would invest  2,407  in Virtus Newfleet ABSMBS on April 20, 2025 and sell it today you would earn a total of  42.00  from holding Virtus Newfleet ABSMBS or generate 1.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Virtus Newfleet ABSMBS  vs.  Simplify Exchange Traded

Virtus Newfleet ABSMBS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus Newfleet ABSMBS are ranked lower than 15 (%) 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.

Simplify Exchange Traded

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simplify Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Simplify Exchange is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Virtus Newfleet and Simplify Exchange

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

The idea behind Virtus Newfleet ABSMBS and Simplify Exchange Traded 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.