Correlation Between Virtus ETF and Vanguard Mega
Can any of the company-specific risk be diversified away by investing in both Virtus ETF and Vanguard Mega 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 Vanguard Mega 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 Vanguard Mega Cap, you can compare the effects of market volatilities on Virtus ETF and Vanguard Mega 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 Vanguard Mega. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus ETF and Vanguard Mega.
Diversification Opportunities for Virtus ETF and Vanguard Mega
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and Vanguard is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Virtus ETF Trust and Vanguard Mega Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Mega Cap 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 Vanguard Mega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Mega Cap has no effect on the direction of Virtus ETF i.e., Virtus ETF and Vanguard Mega go up and down completely randomly.
Pair Corralation between Virtus ETF and Vanguard Mega
Given the investment horizon of 90 days Virtus ETF Trust is expected to generate 1.4 times more return on investment than Vanguard Mega. However, Virtus ETF is 1.4 times more volatile than Vanguard Mega Cap. It trades about 0.34 of its potential returns per unit of risk. Vanguard Mega Cap is currently generating about 0.21 per unit of risk. If you would invest 3,757 in Virtus ETF Trust on August 28, 2024 and sell it today you would earn a total of 314.00 from holding Virtus ETF Trust or generate 8.36% 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. Vanguard Mega Cap
Performance |
| Timeline |
| Virtus ETF Trust |
| Vanguard Mega Cap |
Virtus ETF and Vanguard Mega Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus ETF and Vanguard Mega
The main advantage of trading using opposite Virtus ETF and Vanguard Mega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus ETF position performs unexpectedly, Vanguard Mega 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 Vanguard Mega will offset losses from the drop in Vanguard Mega's long position.| Virtus ETF vs. Invesco Dynamic Large | Virtus ETF vs. Perella Weinberg Partners | Virtus ETF vs. HUMANA INC | Virtus ETF vs. Aquagold International |
| Vanguard Mega vs. BlackRock ETF Trust | Vanguard Mega vs. Rbb Fund | Vanguard Mega vs. Virtus ETF Trust | Vanguard Mega vs. Amplify CWP Enhanced |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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