Correlation Between Fidelity Preferred and Virtus ETF
Can any of the company-specific risk be diversified away by investing in both Fidelity Preferred and Virtus ETF 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 Fidelity Preferred and Virtus ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Preferred Securities and Virtus ETF Trust, you can compare the effects of market volatilities on Fidelity Preferred and Virtus ETF 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 Fidelity Preferred with a short position of Virtus ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Preferred and Virtus ETF.
Diversification Opportunities for Fidelity Preferred and Virtus ETF
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fidelity and Virtus is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Preferred Securities and Virtus ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus ETF Trust and Fidelity Preferred 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 Fidelity Preferred Securities are associated (or correlated) with Virtus ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus ETF Trust has no effect on the direction of Fidelity Preferred i.e., Fidelity Preferred and Virtus ETF go up and down completely randomly.
Pair Corralation between Fidelity Preferred and Virtus ETF
Given the investment horizon of 90 days Fidelity Preferred Securities is expected to generate 2.06 times more return on investment than Virtus ETF. However, Fidelity Preferred is 2.06 times more volatile than Virtus ETF Trust. It trades about 0.46 of its potential returns per unit of risk. Virtus ETF Trust is currently generating about 0.47 per unit of risk. If you would invest 2,105 in Fidelity Preferred Securities on May 29, 2025 and sell it today you would earn a total of 91.00 from holding Fidelity Preferred Securities or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Preferred Securities vs. Virtus ETF Trust
Performance |
| Timeline |
| Fidelity Preferred |
| Virtus ETF Trust |
Fidelity Preferred and Virtus ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Preferred and Virtus ETF
The main advantage of trading using opposite Fidelity Preferred and Virtus ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Preferred position performs unexpectedly, Virtus ETF 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 ETF will offset losses from the drop in Virtus ETF's long position.| Fidelity Preferred vs. Fidelity Corporate Bond | Fidelity Preferred vs. Fidelity High Yield | Fidelity Preferred vs. Fidelity Investment Grade | Fidelity Preferred vs. Fidelity Investment Grade |
| Virtus ETF vs. Franklin Liberty Senior | Virtus ETF vs. Pacer Pacific Asset | Virtus ETF vs. JPMorgan USD Emerging | Virtus ETF vs. Virtus Newfleet Multi Sector |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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