Correlation Between IShares Utilities and Virtus Reaves
Can any of the company-specific risk be diversified away by investing in both IShares Utilities and Virtus Reaves 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 Utilities and Virtus Reaves into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Utilities ETF and Virtus Reaves Utilities, you can compare the effects of market volatilities on IShares Utilities and Virtus Reaves 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 Utilities with a short position of Virtus Reaves. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Utilities and Virtus Reaves.
Diversification Opportunities for IShares Utilities and Virtus Reaves
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Virtus is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares Utilities ETF and Virtus Reaves Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Reaves Utilities and IShares Utilities 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 Utilities ETF are associated (or correlated) with Virtus Reaves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Reaves Utilities has no effect on the direction of IShares Utilities i.e., IShares Utilities and Virtus Reaves go up and down completely randomly.
Pair Corralation between IShares Utilities and Virtus Reaves
Considering the 90-day investment horizon IShares Utilities is expected to generate 1.87 times less return on investment than Virtus Reaves. But when comparing it to its historical volatility, iShares Utilities ETF is 1.17 times less risky than Virtus Reaves. It trades about 0.05 of its potential returns per unit of risk. Virtus Reaves Utilities is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,515 in Virtus Reaves Utilities on August 25, 2024 and sell it today you would earn a total of 2,390 from holding Virtus Reaves Utilities or generate 52.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Utilities ETF vs. Virtus Reaves Utilities
Performance |
| Timeline |
| iShares Utilities ETF |
| Virtus Reaves Utilities |
IShares Utilities and Virtus Reaves Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Utilities and Virtus Reaves
The main advantage of trading using opposite IShares Utilities and Virtus Reaves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Utilities position performs unexpectedly, Virtus Reaves 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 Reaves will offset losses from the drop in Virtus Reaves' long position.| IShares Utilities vs. iShares Industrials ETF | IShares Utilities vs. iShares Consumer Discretionary | IShares Utilities vs. iShares Consumer Staples | IShares Utilities vs. iShares Telecommunications ETF |
| Virtus Reaves vs. Invesco DWA Utilities | Virtus Reaves vs. Invesco SP SmallCap | Virtus Reaves vs. First Trust Utilities | Virtus Reaves vs. iShares Global Utilities |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |