Correlation Between IShares National and Virtus ETF
Can any of the company-specific risk be diversified away by investing in both IShares National and Virtus ETF 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 National and Virtus ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares National Muni and Virtus ETF Trust, you can compare the effects of market volatilities on IShares National and Virtus ETF 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 National with a short position of Virtus ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares National and Virtus ETF.
Diversification Opportunities for IShares National and Virtus ETF
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and Virtus is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding iShares National Muni and Virtus ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus ETF Trust and IShares National 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 National Muni are associated (or correlated) with Virtus ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus ETF Trust has no effect on the direction of IShares National i.e., IShares National and Virtus ETF go up and down completely randomly.
Pair Corralation between IShares National and Virtus ETF
Considering the 90-day investment horizon IShares National is expected to generate 3.76 times less return on investment than Virtus ETF. But when comparing it to its historical volatility, iShares National Muni is 1.85 times less risky than Virtus ETF. It trades about 0.05 of its potential returns per unit of risk. Virtus ETF Trust is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,128 in Virtus ETF Trust on September 4, 2024 and sell it today you would earn a total of 637.00 from holding Virtus ETF Trust or generate 29.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares National Muni vs. Virtus ETF Trust
Performance |
| Timeline |
| iShares National Muni |
| Virtus ETF Trust |
IShares National and Virtus ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares National and Virtus ETF
The main advantage of trading using opposite IShares National and Virtus ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares National position performs unexpectedly, Virtus ETF 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 ETF will offset losses from the drop in Virtus ETF's long position.| IShares National vs. iShares JP Morgan | IShares National vs. iShares iBoxx Investment | IShares National vs. SPDR Nuveen Bloomberg | IShares National vs. VanEck High Yield |
| Virtus ETF vs. iShares iBoxx Investment | Virtus ETF vs. iShares iBoxx High | Virtus ETF vs. iShares National Muni | Virtus ETF vs. Invesco Emerging Markets |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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