Correlation Between IShares Fallen and Virtus ETF
Can any of the company-specific risk be diversified away by investing in both IShares Fallen 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 IShares Fallen and Virtus ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Fallen Angels and Virtus ETF Trust, you can compare the effects of market volatilities on IShares Fallen 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 IShares Fallen with a short position of Virtus ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Fallen and Virtus ETF.
Diversification Opportunities for IShares Fallen and Virtus ETF
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Virtus is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding iShares Fallen Angels 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 IShares Fallen 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 iShares Fallen Angels 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 IShares Fallen i.e., IShares Fallen and Virtus ETF go up and down completely randomly.
Pair Corralation between IShares Fallen and Virtus ETF
Given the investment horizon of 90 days iShares Fallen Angels is expected to generate 1.17 times more return on investment than Virtus ETF. However, IShares Fallen is 1.17 times more volatile than Virtus ETF Trust. It trades about 0.11 of its potential returns per unit of risk. Virtus ETF Trust is currently generating about 0.12 per unit of risk. If you would invest 2,251 in iShares Fallen Angels on November 5, 2024 and sell it today you would earn a total of 461.00 from holding iShares Fallen Angels or generate 20.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
iShares Fallen Angels vs. Virtus ETF Trust
Performance |
| Timeline |
| iShares Fallen Angels |
| Virtus ETF Trust |
IShares Fallen and Virtus ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Fallen and Virtus ETF
The main advantage of trading using opposite IShares Fallen and Virtus ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Fallen 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.| IShares Fallen vs. VanEck Fallen Angel | IShares Fallen vs. iShares Core Total | IShares Fallen vs. iShares 0 5 Year | IShares Fallen vs. iShares 0 5 Year |
| Virtus ETF vs. BondBloxx ETF Trust | Virtus ETF vs. Virtus ETF Trust | Virtus ETF vs. Ocean Park High | Virtus ETF vs. TCW 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |