Correlation Between IShares Broad and Virtus InfraCap
Can any of the company-specific risk be diversified away by investing in both IShares Broad 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 IShares Broad and Virtus InfraCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Broad USD and Virtus InfraCap Preferred, you can compare the effects of market volatilities on IShares Broad 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 IShares Broad with a short position of Virtus InfraCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Broad and Virtus InfraCap.
Diversification Opportunities for IShares Broad and Virtus InfraCap
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Virtus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding iShares Broad USD 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 IShares Broad 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 iShares Broad USD 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 IShares Broad i.e., IShares Broad and Virtus InfraCap go up and down completely randomly.
Pair Corralation between IShares Broad and Virtus InfraCap
Given the investment horizon of 90 days iShares Broad USD is expected to generate 0.44 times more return on investment than Virtus InfraCap. However, iShares Broad USD is 2.27 times less risky than Virtus InfraCap. It trades about 0.14 of its potential returns per unit of risk. Virtus InfraCap Preferred is currently generating about -0.02 per unit of risk. If you would invest 3,706 in iShares Broad USD on August 29, 2024 and sell it today you would earn a total of 25.00 from holding iShares Broad USD or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Broad USD vs. Virtus InfraCap Preferred
Performance |
| Timeline |
| iShares Broad USD |
| Virtus InfraCap Preferred |
IShares Broad and Virtus InfraCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Broad and Virtus InfraCap
The main advantage of trading using opposite IShares Broad and Virtus InfraCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Broad 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.| 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 |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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