Correlation Between Virtus InfraCap and VanEck Preferred

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

Diversification Opportunities for Virtus InfraCap and VanEck Preferred

0.92

Correlation Coefficient

Virtus InfraCap  VanEck Preferred

Almost no diversification

The 3 months correlation between Virtus and VanEck is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Virtus InfraCap Preferred and VanEck Preferred Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Preferred Sec 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 VanEck Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Preferred Sec has no effect on the direction of Virtus InfraCap i.e., Virtus InfraCap and VanEck Preferred go up and down completely randomly.

Pair Corralation between Virtus InfraCap and VanEck Preferred

Given the investment horizon of 90 days Virtus InfraCap is expected to generate 1.2 times less return on investment than VanEck Preferred. But when comparing it to its historical volatility, Virtus InfraCap Preferred is 1.11 times less risky than VanEck Preferred. It trades about 0.17 of its potential returns per unit of risk. VanEck Preferred Securities is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,634  in VanEck Preferred Securities on May 5, 2025 and sell it today you would earn a total of  103.00  from holding VanEck Preferred Securities or generate 6.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Virtus InfraCap Preferred  vs.  VanEck Preferred Securities

Virtus InfraCap Preferred

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus InfraCap Preferred are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. 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.

VanEck Preferred Sec

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Preferred Securities are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, VanEck Preferred is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Virtus InfraCap and VanEck Preferred

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

The idea behind Virtus InfraCap Preferred and VanEck Preferred Securities 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.