Correlation Between Aptus Drawdown and VictoryShares Hedged
Can any of the company-specific risk be diversified away by investing in both Aptus Drawdown and VictoryShares Hedged 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 Aptus Drawdown and VictoryShares Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptus Drawdown Managed and VictoryShares Hedged Equity, you can compare the effects of market volatilities on Aptus Drawdown and VictoryShares Hedged 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 Aptus Drawdown with a short position of VictoryShares Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Drawdown and VictoryShares Hedged.
Diversification Opportunities for Aptus Drawdown and VictoryShares Hedged
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aptus and VictoryShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Drawdown Managed and VictoryShares Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares Hedged and Aptus Drawdown 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 Aptus Drawdown Managed are associated (or correlated) with VictoryShares Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares Hedged has no effect on the direction of Aptus Drawdown i.e., Aptus Drawdown and VictoryShares Hedged go up and down completely randomly.
Pair Corralation between Aptus Drawdown and VictoryShares Hedged
Given the investment horizon of 90 days Aptus Drawdown Managed is expected to generate 1.39 times more return on investment than VictoryShares Hedged. However, Aptus Drawdown is 1.39 times more volatile than VictoryShares Hedged Equity. It trades about 0.15 of its potential returns per unit of risk. VictoryShares Hedged Equity is currently generating about 0.1 per unit of risk. If you would invest 4,205 in Aptus Drawdown Managed on September 1, 2024 and sell it today you would earn a total of 596.00 from holding Aptus Drawdown Managed or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 80.16% |
| Values | Daily Returns |
Aptus Drawdown Managed vs. VictoryShares Hedged Equity
Performance |
| Timeline |
| Aptus Drawdown Managed |
| VictoryShares Hedged |
Aptus Drawdown and VictoryShares Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aptus Drawdown and VictoryShares Hedged
The main advantage of trading using opposite Aptus Drawdown and VictoryShares Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptus Drawdown position performs unexpectedly, VictoryShares Hedged 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 VictoryShares Hedged will offset losses from the drop in VictoryShares Hedged's long position.| Aptus Drawdown vs. Core Alternative ETF | Aptus Drawdown vs. Invesco SP 500 | Aptus Drawdown vs. ETF Series Solutions | Aptus Drawdown vs. WisdomTree Target Range |
| VictoryShares Hedged vs. Core Alternative ETF | VictoryShares Hedged vs. Invesco SP 500 | VictoryShares Hedged vs. ETF Series Solutions | VictoryShares Hedged vs. WisdomTree Target Range |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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