Correlation Between IShares Trust and Virtus
Can any of the company-specific risk be diversified away by investing in both IShares Trust and Virtus 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 Trust and Virtus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and Virtus, you can compare the effects of market volatilities on IShares Trust and Virtus 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 Trust with a short position of Virtus. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and Virtus.
Diversification Opportunities for IShares Trust and Virtus
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Virtus is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and Virtus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus and IShares Trust 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 Trust are associated (or correlated) with Virtus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus has no effect on the direction of IShares Trust i.e., IShares Trust and Virtus go up and down completely randomly.
Pair Corralation between IShares Trust and Virtus
If you would invest 2,294 in iShares Trust on September 4, 2024 and sell it today you would earn a total of 12.00 from holding iShares Trust or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
iShares Trust vs. Virtus
Performance |
| Timeline |
| iShares Trust |
| Virtus |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IShares Trust and Virtus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Trust and Virtus
The main advantage of trading using opposite IShares Trust and Virtus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, Virtus 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 will offset losses from the drop in Virtus' long position.The idea behind iShares Trust and Virtus 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.| Virtus vs. Virtus Newfleet Multi Sector | Virtus vs. Invesco BulletShares 2024 | Virtus vs. FlexShares Core Select | Virtus vs. Invesco BulletShares 2025 |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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