Correlation Between Virtus ETF and Vanguard ESG
Can any of the company-specific risk be diversified away by investing in both Virtus ETF and Vanguard ESG 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 ETF and Vanguard ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus ETF Trust and Vanguard ESG Corporate, you can compare the effects of market volatilities on Virtus ETF and Vanguard ESG 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 ETF with a short position of Vanguard ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus ETF and Vanguard ESG.
Diversification Opportunities for Virtus ETF and Vanguard ESG
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Virtus and Vanguard is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Virtus ETF Trust and Vanguard ESG Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard ESG Corporate and Virtus ETF 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 ETF Trust are associated (or correlated) with Vanguard ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard ESG Corporate has no effect on the direction of Virtus ETF i.e., Virtus ETF and Vanguard ESG go up and down completely randomly.
Pair Corralation between Virtus ETF and Vanguard ESG
Given the investment horizon of 90 days Virtus ETF Trust is expected to generate 1.01 times more return on investment than Vanguard ESG. However, Virtus ETF is 1.01 times more volatile than Vanguard ESG Corporate. It trades about 0.27 of its potential returns per unit of risk. Vanguard ESG Corporate is currently generating about 0.05 per unit of risk. If you would invest 2,641 in Virtus ETF Trust on October 20, 2024 and sell it today you would earn a total of 45.00 from holding Virtus ETF Trust or generate 1.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Virtus ETF Trust vs. Vanguard ESG Corporate
Performance |
Timeline |
Virtus ETF Trust |
Vanguard ESG Corporate |
Virtus ETF and Vanguard ESG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Virtus ETF and Vanguard ESG
The main advantage of trading using opposite Virtus ETF and Vanguard ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus ETF position performs unexpectedly, Vanguard ESG 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 Vanguard ESG will offset losses from the drop in Vanguard ESG's long position.Virtus ETF vs. T Rowe Price | Virtus ETF vs. Angel Oak UltraShort | Virtus ETF vs. T Rowe Price | Virtus ETF vs. Ab Tax Aware Short |
Vanguard ESG vs. Vanguard ESG International | Vanguard ESG vs. Vanguard ESG Stock | Vanguard ESG vs. Vanguard Total Corporate | Vanguard ESG vs. Vanguard Ultra Short Bond |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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