Correlation Between Return Stacked and Virtus InfraCap

Can any of the company-specific risk be diversified away by investing in both Return Stacked 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 Return Stacked and Virtus InfraCap into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Return Stacked Bonds and Virtus InfraCap Preferred, you can compare the effects of market volatilities on Return Stacked 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 Return Stacked with a short position of Virtus InfraCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Return Stacked and Virtus InfraCap.

Diversification Opportunities for Return Stacked and Virtus InfraCap

-0.26

Correlation Coefficient

Return Stacked  Virtus InfraCap

Very good diversification

The 3 months correlation between Return and Virtus is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Return Stacked Bonds 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 Return Stacked 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 Return Stacked Bonds 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 Return Stacked i.e., Return Stacked and Virtus InfraCap go up and down completely randomly.

Pair Corralation between Return Stacked and Virtus InfraCap

Given the investment horizon of 90 days Return Stacked Bonds is expected to generate 0.44 times more return on investment than Virtus InfraCap. However, Return Stacked Bonds is 2.27 times less risky than Virtus InfraCap. It trades about 0.08 of its potential returns per unit of risk. Virtus InfraCap Preferred is currently generating about -0.04 per unit of risk. If you would invest  2,010  in Return Stacked Bonds on February 3, 2025 and sell it today you would earn a total of  45.00  from holding Return Stacked Bonds or generate 2.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Return Stacked Bonds  vs.  Virtus InfraCap Preferred

Return Stacked Bonds

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Return Stacked Bonds are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Return Stacked is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Virtus InfraCap Preferred

Risk-Adjusted Performance

Very Weak

Over the last 90 days Virtus InfraCap Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Virtus InfraCap is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Return Stacked and Virtus InfraCap

The main advantage of trading using opposite Return Stacked and Virtus InfraCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Return Stacked 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.

The idea behind Return Stacked Bonds and Virtus InfraCap Preferred 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.