Correlation Between Vanguard Short and Virtus ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard Short 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 Vanguard Short and Virtus ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Short Term Bond and Virtus ETF Trust, you can compare the effects of market volatilities on Vanguard Short 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 Vanguard Short with a short position of Virtus ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Short and Virtus ETF.
Diversification Opportunities for Vanguard Short and Virtus ETF
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Virtus is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Short Term Bond 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 Vanguard Short 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 Vanguard Short Term Bond 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 Vanguard Short i.e., Vanguard Short and Virtus ETF go up and down completely randomly.
Pair Corralation between Vanguard Short and Virtus ETF
Considering the 90-day investment horizon Vanguard Short is expected to generate 1.63 times less return on investment than Virtus ETF. In addition to that, Vanguard Short is 1.56 times more volatile than Virtus ETF Trust. It trades about 0.12 of its total potential returns per unit of risk. Virtus ETF Trust is currently generating about 0.31 per unit of volatility. If you would invest 2,547 in Virtus ETF Trust on November 1, 2024 and sell it today you would earn a total of 39.00 from holding Virtus ETF Trust or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Short Term Bond vs. Virtus ETF Trust
Performance |
| Timeline |
| Vanguard Short Term |
| Virtus ETF Trust |
Vanguard Short and Virtus ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Short and Virtus ETF
The main advantage of trading using opposite Vanguard Short and Virtus ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Short 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.| Vanguard Short vs. Vanguard Long Term Bond | Vanguard Short vs. Vanguard Short Term Corporate | Vanguard Short vs. Vanguard Total Bond | Vanguard Short vs. Vanguard Intermediate Term Corporate |
| Virtus ETF vs. VanEck Vectors Moodys | Virtus ETF vs. Valued Advisers Trust | Virtus ETF vs. Xtrackers California Municipal | Virtus ETF vs. Principal Exchange Traded Funds |
Check out your portfolio center.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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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