Correlation Between Virtus InfraCap and PIMCO Preferred
Can any of the company-specific risk be diversified away by investing in both Virtus InfraCap and PIMCO 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 PIMCO 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 PIMCO Preferred And, you can compare the effects of market volatilities on Virtus InfraCap and PIMCO 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 PIMCO Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus InfraCap and PIMCO Preferred.
Diversification Opportunities for Virtus InfraCap and PIMCO Preferred
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and PIMCO is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Virtus InfraCap Preferred and PIMCO Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Preferred And 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 PIMCO Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Preferred And has no effect on the direction of Virtus InfraCap i.e., Virtus InfraCap and PIMCO Preferred go up and down completely randomly.
Pair Corralation between Virtus InfraCap and PIMCO Preferred
Given the investment horizon of 90 days Virtus InfraCap Preferred is expected to generate 2.37 times more return on investment than PIMCO Preferred. However, Virtus InfraCap is 2.37 times more volatile than PIMCO Preferred And. It trades about -0.02 of its potential returns per unit of risk. PIMCO Preferred And is currently generating about -0.08 per unit of risk. If you would invest 2,255 in Virtus InfraCap Preferred on August 26, 2024 and sell it today you would lose (9.00) from holding Virtus InfraCap Preferred or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus InfraCap Preferred vs. PIMCO Preferred And
Performance |
| Timeline |
| Virtus InfraCap Preferred |
| PIMCO Preferred And |
Virtus InfraCap and PIMCO Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus InfraCap and PIMCO Preferred
The main advantage of trading using opposite Virtus InfraCap and PIMCO Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus InfraCap position performs unexpectedly, PIMCO 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 PIMCO Preferred will offset losses from the drop in PIMCO Preferred's long position.| Virtus InfraCap vs. ETF Series Solutions | Virtus InfraCap vs. Aquagold International | Virtus InfraCap vs. Morningstar Unconstrained Allocation | Virtus InfraCap vs. High Yield Municipal Fund |
| PIMCO Preferred vs. ETF Series Solutions | PIMCO Preferred vs. Aquagold International | PIMCO Preferred vs. Morningstar Unconstrained Allocation | PIMCO Preferred vs. High Yield Municipal Fund |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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