Correlation Between Virtus InfraCap and Principal Exchange
Can any of the company-specific risk be diversified away by investing in both Virtus InfraCap and Principal Exchange 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 Principal Exchange 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 Principal Exchange Traded Funds, you can compare the effects of market volatilities on Virtus InfraCap and Principal Exchange 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 Principal Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus InfraCap and Principal Exchange.
Diversification Opportunities for Virtus InfraCap and Principal Exchange
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and Principal is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Virtus InfraCap Preferred and Principal Exchange Traded Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Exchange 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 Principal Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Exchange has no effect on the direction of Virtus InfraCap i.e., Virtus InfraCap and Principal Exchange go up and down completely randomly.
Pair Corralation between Virtus InfraCap and Principal Exchange
Given the investment horizon of 90 days Virtus InfraCap Preferred is expected to generate 3.55 times more return on investment than Principal Exchange. However, Virtus InfraCap is 3.55 times more volatile than Principal Exchange Traded Funds. It trades about 0.15 of its potential returns per unit of risk. Principal Exchange Traded Funds is currently generating about 0.16 per unit of risk. If you would invest 2,232 in Virtus InfraCap Preferred on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Virtus InfraCap Preferred or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Virtus InfraCap Preferred vs. Principal Exchange Traded Fund
Performance |
| Timeline |
| Virtus InfraCap Preferred |
| Principal Exchange |
Virtus InfraCap and Principal Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus InfraCap and Principal Exchange
The main advantage of trading using opposite Virtus InfraCap and Principal Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus InfraCap position performs unexpectedly, Principal Exchange 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 Principal Exchange will offset losses from the drop in Principal Exchange'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 |
| Principal Exchange vs. Principal Spectrum Preferred | Principal Exchange vs. AAM Low Duration | Principal Exchange vs. Global X Variable | Principal Exchange vs. PGIM Active High |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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