Correlation Between Virtus ETF and IShares SP
Can any of the company-specific risk be diversified away by investing in both Virtus ETF and IShares SP 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 Virtus ETF and IShares SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus ETF Trust and iShares SP 500, you can compare the effects of market volatilities on Virtus ETF and IShares SP 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 Virtus ETF with a short position of IShares SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus ETF and IShares SP.
Diversification Opportunities for Virtus ETF and IShares SP
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and IShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Virtus ETF Trust and iShares SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SP 500 and Virtus ETF 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 Virtus ETF Trust are associated (or correlated) with IShares SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SP 500 has no effect on the direction of Virtus ETF i.e., Virtus ETF and IShares SP go up and down completely randomly.
Pair Corralation between Virtus ETF and IShares SP
Given the investment horizon of 90 days Virtus ETF Trust is expected to generate 1.58 times more return on investment than IShares SP. However, Virtus ETF is 1.58 times more volatile than iShares SP 500. It trades about 0.29 of its potential returns per unit of risk. iShares SP 500 is currently generating about 0.3 per unit of risk. If you would invest 3,766 in Virtus ETF Trust on August 30, 2024 and sell it today you would earn a total of 282.00 from holding Virtus ETF Trust or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus ETF Trust vs. iShares SP 500
Performance |
| Timeline |
| Virtus ETF Trust |
| iShares SP 500 |
Virtus ETF and IShares SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus ETF and IShares SP
The main advantage of trading using opposite Virtus ETF and IShares SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus ETF position performs unexpectedly, IShares SP 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 IShares SP will offset losses from the drop in IShares SP's long position.| Virtus ETF vs. iShares Small Cap | Virtus ETF vs. Pacer Cash Cows | Virtus ETF vs. GXO Logistics | Virtus ETF vs. ProShares Pet Care |
| IShares SP vs. iShares SP 500 | IShares SP vs. iShares SP Mid Cap | IShares SP vs. iShares SP Small Cap | IShares SP vs. iShares SP Mid Cap |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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