Correlation Between Dow Jones and Virtus ETF
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Virtus ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Virtus ETF Trust, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Virtus ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Virtus ETF.
Diversification Opportunities for Dow Jones and Virtus ETF
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Virtus is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Virtus ETF go up and down completely randomly.
Pair Corralation between Dow Jones and Virtus ETF
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 11.49 times more return on investment than Virtus ETF. However, Dow Jones is 11.49 times more volatile than Virtus ETF Trust. It trades about 0.27 of its potential returns per unit of risk. Virtus ETF Trust is currently generating about 0.24 per unit of risk. If you would invest 4,223,305 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 248,901 from holding Dow Jones Industrial or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dow Jones Industrial vs. Virtus ETF Trust
Performance |
| Timeline |
Dow Jones and Virtus ETF Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Virtus ETF Trust
Pair trading matchups for Virtus ETF
Pair Trading with Dow Jones and Virtus ETF
The main advantage of trading using opposite Dow Jones and Virtus ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
| Virtus ETF vs. Valued Advisers Trust | Virtus ETF vs. Columbia Diversified Fixed | Virtus ETF vs. Principal Exchange Traded Funds | Virtus ETF vs. Doubleline Etf Trust |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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