Correlation Between Barclays ETN and VictoryShares Value
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and VictoryShares Value 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 Barclays ETN and VictoryShares Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays ETN Select and VictoryShares Value Momentum, you can compare the effects of market volatilities on Barclays ETN and VictoryShares Value 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 Barclays ETN with a short position of VictoryShares Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and VictoryShares Value.
Diversification Opportunities for Barclays ETN and VictoryShares Value
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Barclays and VictoryShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and VictoryShares Value Momentum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares Value and Barclays ETN 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 Barclays ETN Select are associated (or correlated) with VictoryShares Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares Value has no effect on the direction of Barclays ETN i.e., Barclays ETN and VictoryShares Value go up and down completely randomly.
Pair Corralation between Barclays ETN and VictoryShares Value
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 1.06 times more return on investment than VictoryShares Value. However, Barclays ETN is 1.06 times more volatile than VictoryShares Value Momentum. It trades about 0.27 of its potential returns per unit of risk. VictoryShares Value Momentum is currently generating about 0.2 per unit of risk. If you would invest 2,584 in Barclays ETN Select on August 29, 2024 and sell it today you would earn a total of 400.00 from holding Barclays ETN Select or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Select vs. VictoryShares Value Momentum
Performance |
| Timeline |
| Barclays ETN Select |
| VictoryShares Value |
Barclays ETN and VictoryShares Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and VictoryShares Value
The main advantage of trading using opposite Barclays ETN and VictoryShares Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, VictoryShares Value 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 Value will offset losses from the drop in VictoryShares Value's long position.| Barclays ETN vs. Alerian Energy Infrastructure | Barclays ETN vs. UBS AG London | Barclays ETN vs. First Trust North | Barclays ETN vs. Tortoise North American |
| VictoryShares Value vs. VictoryShares Small Mid | VictoryShares Value vs. VictoryShares International Value | VictoryShares Value vs. VictoryShares Emerging Markets | VictoryShares Value vs. SPDR Russell 1000 |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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