Correlation Between Virtus LifeSci and First Trust
Can any of the company-specific risk be diversified away by investing in both Virtus LifeSci and First Trust 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 LifeSci and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus LifeSci Biotech and First Trust NYSE, you can compare the effects of market volatilities on Virtus LifeSci and First Trust 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 LifeSci with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus LifeSci and First Trust.
Diversification Opportunities for Virtus LifeSci and First Trust
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Virtus and First is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Virtus LifeSci Biotech and First Trust NYSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust NYSE and Virtus LifeSci 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 LifeSci Biotech are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust NYSE has no effect on the direction of Virtus LifeSci i.e., Virtus LifeSci and First Trust go up and down completely randomly.
Pair Corralation between Virtus LifeSci and First Trust
Considering the 90-day investment horizon Virtus LifeSci Biotech is expected to under-perform the First Trust. In addition to that, Virtus LifeSci is 1.8 times more volatile than First Trust NYSE. It trades about -0.29 of its total potential returns per unit of risk. First Trust NYSE is currently generating about -0.24 per unit of volatility. If you would invest 15,348 in First Trust NYSE on January 25, 2024 and sell it today you would lose (813.00) from holding First Trust NYSE or give up 5.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus LifeSci Biotech vs. First Trust NYSE
Performance |
| Timeline |
| Virtus LifeSci Biotech |
| First Trust NYSE |
Virtus LifeSci and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus LifeSci and First Trust
The main advantage of trading using opposite Virtus LifeSci and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus LifeSci position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Virtus LifeSci vs. iShares Insurance ETF | Virtus LifeSci vs. SCOR PK | Virtus LifeSci vs. Morningstar Unconstrained Allocation | Virtus LifeSci vs. SPACE |
| First Trust vs. iShares Insurance ETF | First Trust vs. SCOR PK | First Trust vs. Morningstar Unconstrained Allocation | First Trust vs. SPACE |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |