Correlation Between SPDR ICE and Virtus InfraCap
Can any of the company-specific risk be diversified away by investing in both SPDR ICE and Virtus InfraCap 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 SPDR ICE and Virtus InfraCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR ICE Preferred and Virtus InfraCap Preferred, you can compare the effects of market volatilities on SPDR ICE and Virtus InfraCap 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 SPDR ICE with a short position of Virtus InfraCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR ICE and Virtus InfraCap.
Diversification Opportunities for SPDR ICE and Virtus InfraCap
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and Virtus is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding SPDR ICE Preferred and Virtus InfraCap Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus InfraCap Preferred and SPDR ICE 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 SPDR ICE Preferred are associated (or correlated) with Virtus InfraCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus InfraCap Preferred has no effect on the direction of SPDR ICE i.e., SPDR ICE and Virtus InfraCap go up and down completely randomly.
Pair Corralation between SPDR ICE and Virtus InfraCap
Considering the 90-day investment horizon SPDR ICE Preferred is expected to under-perform the Virtus InfraCap. In addition to that, SPDR ICE is 1.4 times more volatile than Virtus InfraCap Preferred. It trades about -0.09 of its total potential returns per unit of risk. Virtus InfraCap Preferred is currently generating about -0.02 per unit of volatility. If you would invest 2,256 in Virtus InfraCap Preferred on August 29, 2024 and sell it today you would lose (6.00) from holding Virtus InfraCap Preferred or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR ICE Preferred vs. Virtus InfraCap Preferred
Performance |
| Timeline |
| SPDR ICE Preferred |
| Virtus InfraCap Preferred |
SPDR ICE and Virtus InfraCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR ICE and Virtus InfraCap
The main advantage of trading using opposite SPDR ICE and Virtus InfraCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR ICE position performs unexpectedly, Virtus InfraCap 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 Virtus InfraCap will offset losses from the drop in Virtus InfraCap's long position.| SPDR ICE vs. VanEck Preferred Securities | SPDR ICE vs. Invesco Preferred ETF | SPDR ICE vs. Invesco Financial Preferred | SPDR ICE vs. Global X SuperIncome |
| Virtus InfraCap vs. ETFis Series Trust | Virtus InfraCap vs. XAI Octagon Floating | Virtus InfraCap vs. InfraCap MLP ETF | Virtus InfraCap vs. VanEck BDC Income |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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