Correlation Between Virtus Newfleet and MicroSectors Gold

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

Diversification Opportunities for Virtus Newfleet and MicroSectors Gold

-0.82

Correlation Coefficient

Virtus Newfleet  MicroSectors Gold

Pay attention - limited upside

The 3 months correlation between Virtus and MicroSectors is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Newfleet ABSMBS and MicroSectors Gold Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors Gold Miners 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 MicroSectors Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors Gold Miners has no effect on the direction of Virtus Newfleet i.e., Virtus Newfleet and MicroSectors Gold go up and down completely randomly.

Pair Corralation between Virtus Newfleet and MicroSectors Gold

Given the investment horizon of 90 days Virtus Newfleet ABSMBS is expected to generate 0.02 times more return on investment than MicroSectors Gold. However, Virtus Newfleet ABSMBS is 43.54 times less risky than MicroSectors Gold. It trades about 0.18 of its potential returns per unit of risk. MicroSectors Gold Miners is currently generating about -0.08 per unit of risk. If you would invest  2,404  in Virtus Newfleet ABSMBS on May 2, 2025 and sell it today you would earn a total of  41.00  from holding Virtus Newfleet ABSMBS or generate 1.71% return on investment over 90 days.

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

Virtus Newfleet ABSMBS  vs.  MicroSectors Gold Miners

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 14 (%) 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.

MicroSectors Gold Miners

Risk-Adjusted Performance

Very Weak

Over the last 90 days MicroSectors Gold Miners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's basic indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Pair Trading with Virtus Newfleet and MicroSectors Gold

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

The idea behind Virtus Newfleet ABSMBS and MicroSectors Gold Miners 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.