Correlation Between Virtus InfraCap and IShares Broad
Can any of the company-specific risk be diversified away by investing in both Virtus InfraCap and IShares Broad 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 IShares Broad 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 iShares Broad USD, you can compare the effects of market volatilities on Virtus InfraCap and IShares Broad 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 IShares Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus InfraCap and IShares Broad.
Diversification Opportunities for Virtus InfraCap and IShares Broad
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and IShares is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Virtus InfraCap Preferred and iShares Broad USD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Broad USD 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 IShares Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Broad USD has no effect on the direction of Virtus InfraCap i.e., Virtus InfraCap and IShares Broad go up and down completely randomly.
Pair Corralation between Virtus InfraCap and IShares Broad
Given the investment horizon of 90 days Virtus InfraCap is expected to generate 1.21 times less return on investment than IShares Broad. In addition to that, Virtus InfraCap is 1.99 times more volatile than iShares Broad USD. It trades about 0.15 of its total potential returns per unit of risk. iShares Broad USD is currently generating about 0.36 per unit of volatility. If you would invest 3,692 in iShares Broad USD on September 1, 2024 and sell it today you would earn a total of 61.00 from holding iShares Broad USD or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus InfraCap Preferred vs. iShares Broad USD
Performance |
| Timeline |
| Virtus InfraCap Preferred |
| iShares Broad USD |
Virtus InfraCap and IShares Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus InfraCap and IShares Broad
The main advantage of trading using opposite Virtus InfraCap and IShares Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus InfraCap position performs unexpectedly, IShares Broad 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 IShares Broad will offset losses from the drop in IShares Broad'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 |
| IShares Broad vs. Xtrackers USD High | IShares Broad vs. iShares 0 5 Year | IShares Broad vs. iShares Broad USD | IShares Broad vs. Global X Preferred |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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