Correlation Between Virtus InfraCap and InfraCap Equity
Can any of the company-specific risk be diversified away by investing in both Virtus InfraCap and InfraCap Equity 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 InfraCap Equity 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 InfraCap Equity Income, you can compare the effects of market volatilities on Virtus InfraCap and InfraCap Equity 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 InfraCap Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus InfraCap and InfraCap Equity.
Diversification Opportunities for Virtus InfraCap and InfraCap Equity
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and InfraCap is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Virtus InfraCap Preferred and InfraCap Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfraCap Equity Income 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 InfraCap Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfraCap Equity Income has no effect on the direction of Virtus InfraCap i.e., Virtus InfraCap and InfraCap Equity go up and down completely randomly.
Pair Corralation between Virtus InfraCap and InfraCap Equity
Given the investment horizon of 90 days Virtus InfraCap is expected to generate 3.6 times less return on investment than InfraCap Equity. But when comparing it to its historical volatility, Virtus InfraCap Preferred is 2.15 times less risky than InfraCap Equity. It trades about 0.13 of its potential returns per unit of risk. InfraCap Equity Income is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,694 in InfraCap Equity Income on August 30, 2024 and sell it today you would earn a total of 123.00 from holding InfraCap Equity Income or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus InfraCap Preferred vs. InfraCap Equity Income
Performance |
| Timeline |
| Virtus InfraCap Preferred |
| InfraCap Equity Income |
Virtus InfraCap and InfraCap Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus InfraCap and InfraCap Equity
The main advantage of trading using opposite Virtus InfraCap and InfraCap Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus InfraCap position performs unexpectedly, InfraCap Equity 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 InfraCap Equity will offset losses from the drop in InfraCap Equity'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 |
| InfraCap Equity vs. Hoya Capital High | InfraCap Equity vs. Virtus InfraCap Preferred | InfraCap Equity vs. InfraCap MLP ETF | InfraCap Equity vs. Qurate Retail |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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