Correlation Between Virtus ETF and IBCD

Can any of the company-specific risk be diversified away by investing in both Virtus ETF and IBCD 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 IBCD 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 IBCD, you can compare the effects of market volatilities on Virtus ETF and IBCD 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 IBCD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus ETF and IBCD.

Diversification Opportunities for Virtus ETF and IBCD

0.0

Correlation Coefficient

Virtus ETF  IBCD

Pay attention - limited upside

The 3 months correlation between Virtus and IBCD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Virtus ETF Trust and IBCD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBCD 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 IBCD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBCD has no effect on the direction of Virtus ETF i.e., Virtus ETF and IBCD go up and down completely randomly.

Pair Corralation between Virtus ETF and IBCD

If you would invest  2,366  in Virtus ETF Trust on December 20, 2024 and sell it today you would earn a total of  2.00  from holding Virtus ETF Trust or generate 0.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Virtus ETF Trust  vs.  IBCD

Virtus ETF Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus ETF Trust are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Virtus ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

IBCD

Risk-Adjusted Performance

Very Weak

Over the last 90 days IBCD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, IBCD is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Virtus ETF and IBCD

The main advantage of trading using opposite Virtus ETF and IBCD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus ETF position performs unexpectedly, IBCD 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 IBCD will offset losses from the drop in IBCD's long position.

The idea behind Virtus ETF Trust and IBCD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.