Correlation Between ETFis Series and VanEck Preferred
Can any of the company-specific risk be diversified away by investing in both ETFis Series and VanEck 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 ETFis Series and VanEck Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETFis Series Trust and VanEck Preferred Securities, you can compare the effects of market volatilities on ETFis Series and VanEck 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 ETFis Series with a short position of VanEck Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETFis Series and VanEck Preferred.
Diversification Opportunities for ETFis Series and VanEck Preferred
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ETFis and VanEck is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding ETFis Series Trust and VanEck Preferred Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Preferred Sec and ETFis Series 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 ETFis Series Trust are associated (or correlated) with VanEck Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Preferred Sec has no effect on the direction of ETFis Series i.e., ETFis Series and VanEck Preferred go up and down completely randomly.
Pair Corralation between ETFis Series and VanEck Preferred
Given the investment horizon of 90 days ETFis Series Trust is expected to under-perform the VanEck Preferred. But the etf apears to be less risky and, when comparing its historical volatility, ETFis Series Trust is 1.16 times less risky than VanEck Preferred. The etf trades about -0.08 of its potential returns per unit of risk. The VanEck Preferred Securities is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,802 in VanEck Preferred Securities on August 31, 2024 and sell it today you would earn a total of 4.00 from holding VanEck Preferred Securities or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
ETFis Series Trust vs. VanEck Preferred Securities
Performance |
| Timeline |
| ETFis Series Trust |
| VanEck Preferred Sec |
ETFis Series and VanEck Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETFis Series and VanEck Preferred
The main advantage of trading using opposite ETFis Series and VanEck Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETFis Series position performs unexpectedly, VanEck 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 VanEck Preferred will offset losses from the drop in VanEck Preferred's long position.| ETFis Series vs. Virtus InfraCap Preferred | ETFis Series vs. VanEck Preferred Securities | ETFis Series vs. Global X Preferred | ETFis Series vs. Innovator SP Investment |
| VanEck Preferred vs. Global X SuperIncome | VanEck Preferred vs. SPDR ICE Preferred | VanEck Preferred vs. Invesco Preferred ETF | VanEck 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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