Correlation Between Virtus InfraCap and Fidelity Preferred
Can any of the company-specific risk be diversified away by investing in both Virtus InfraCap and Fidelity Preferred 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 InfraCap and Fidelity Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus InfraCap Preferred and Fidelity Preferred Securities, you can compare the effects of market volatilities on Virtus InfraCap and Fidelity Preferred 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 InfraCap with a short position of Fidelity Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus InfraCap and Fidelity Preferred.
Diversification Opportunities for Virtus InfraCap and Fidelity Preferred
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtus and Fidelity is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Virtus InfraCap Preferred and Fidelity Preferred Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Preferred and Virtus InfraCap 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 InfraCap Preferred are associated (or correlated) with Fidelity Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Preferred has no effect on the direction of Virtus InfraCap i.e., Virtus InfraCap and Fidelity Preferred go up and down completely randomly.
Pair Corralation between Virtus InfraCap and Fidelity Preferred
Given the investment horizon of 90 days Virtus InfraCap Preferred is expected to generate 2.1 times more return on investment than Fidelity Preferred. However, Virtus InfraCap is 2.1 times more volatile than Fidelity Preferred Securities. It trades about 0.19 of its potential returns per unit of risk. Fidelity Preferred Securities is currently generating about 0.16 per unit of risk. If you would invest 2,031 in Virtus InfraCap Preferred on September 1, 2024 and sell it today you would earn a total of 235.00 from holding Virtus InfraCap Preferred or generate 11.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Virtus InfraCap Preferred vs. Fidelity Preferred Securities
Performance |
| Timeline |
| Virtus InfraCap Preferred |
| Fidelity Preferred |
Virtus InfraCap and Fidelity Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus InfraCap and Fidelity Preferred
The main advantage of trading using opposite Virtus InfraCap and Fidelity Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus InfraCap position performs unexpectedly, Fidelity Preferred 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 Fidelity Preferred will offset losses from the drop in Fidelity Preferred's long position.| Virtus InfraCap vs. ETFis Series Trust | Virtus InfraCap vs. XAI Octagon Floating | Virtus InfraCap vs. InfraCap MLP ETF | Virtus InfraCap vs. VanEck BDC Income |
| Fidelity Preferred vs. VanEck Preferred Securities | Fidelity Preferred vs. Invesco Preferred ETF | Fidelity Preferred vs. Global X SuperIncome | Fidelity Preferred vs. Invesco Variable Rate |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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