Correlation Between Virtus InfraCap and Innovator
Can any of the company-specific risk be diversified away by investing in both Virtus InfraCap and Innovator 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 Innovator 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 Innovator SP Investment, you can compare the effects of market volatilities on Virtus InfraCap and Innovator 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 Innovator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus InfraCap and Innovator.
Diversification Opportunities for Virtus InfraCap and Innovator
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and Innovator is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Virtus InfraCap Preferred and Innovator SP Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator SP Investment 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 Innovator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator SP Investment has no effect on the direction of Virtus InfraCap i.e., Virtus InfraCap and Innovator go up and down completely randomly.
Pair Corralation between Virtus InfraCap and Innovator
Given the investment horizon of 90 days Virtus InfraCap Preferred is expected to generate 0.66 times more return on investment than Innovator. However, Virtus InfraCap Preferred is 1.51 times less risky than Innovator. It trades about 0.0 of its potential returns per unit of risk. Innovator SP Investment is currently generating about -0.02 per unit of risk. If you would invest 2,137 in Virtus InfraCap Preferred on December 29, 2024 and sell it today you would lose (1.00) from holding Virtus InfraCap Preferred or give up 0.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Virtus InfraCap Preferred vs. Innovator SP Investment
Performance |
Timeline |
Virtus InfraCap Preferred |
Innovator SP Investment |
Virtus InfraCap and Innovator Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Virtus InfraCap and Innovator
The main advantage of trading using opposite Virtus InfraCap and Innovator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus InfraCap position performs unexpectedly, Innovator 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 Innovator will offset losses from the drop in Innovator'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 |
Innovator vs. ETFis Series Trust | Innovator vs. Global X Preferred | Innovator vs. VanEck Preferred Securities | Innovator vs. Global X SuperIncome |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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