Correlation Between Global X and Virtus InfraCap
Can any of the company-specific risk be diversified away by investing in both Global X and Virtus InfraCap 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 Global X and Virtus InfraCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X MLP and Virtus InfraCap Preferred, you can compare the effects of market volatilities on Global X and Virtus InfraCap 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 Global X with a short position of Virtus InfraCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Virtus InfraCap.
Diversification Opportunities for Global X and Virtus InfraCap
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Virtus is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Global X MLP and Virtus InfraCap Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus InfraCap Preferred and Global X 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 Global X MLP are associated (or correlated) with Virtus InfraCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus InfraCap Preferred has no effect on the direction of Global X i.e., Global X and Virtus InfraCap go up and down completely randomly.
Pair Corralation between Global X and Virtus InfraCap
Given the investment horizon of 90 days Global X MLP is expected to generate 1.92 times more return on investment than Virtus InfraCap. However, Global X is 1.92 times more volatile than Virtus InfraCap Preferred. It trades about 0.53 of its potential returns per unit of risk. Virtus InfraCap Preferred is currently generating about 0.13 per unit of risk. If you would invest 4,666 in Global X MLP on August 30, 2024 and sell it today you would earn a total of 493.00 from holding Global X MLP or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X MLP vs. Virtus InfraCap Preferred
Performance |
| Timeline |
| Global X MLP |
| Virtus InfraCap Preferred |
Global X and Virtus InfraCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Virtus InfraCap
The main advantage of trading using opposite Global X and Virtus InfraCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Virtus InfraCap 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 InfraCap will offset losses from the drop in Virtus InfraCap's long position.| Global X vs. Global X MLP | Global X vs. InfraCap MLP ETF | Global X vs. Barclays ETN Select | Global X vs. Alerian Energy Infrastructure |
| Virtus InfraCap vs. ETFis Series Trust | Virtus InfraCap vs. XAI Octagon Floating | Virtus InfraCap vs. InfraCap MLP ETF | Virtus InfraCap vs. VanEck BDC Income |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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