Correlation Between Core Alternative and VictoryShares Hedged

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Can any of the company-specific risk be diversified away by investing in both Core Alternative 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 Core Alternative and VictoryShares Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Core Alternative ETF and VictoryShares Hedged Equity, you can compare the effects of market volatilities on Core Alternative 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 Core Alternative with a short position of VictoryShares Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Core Alternative and VictoryShares Hedged.

Diversification Opportunities for Core Alternative and VictoryShares Hedged

CoreVictorySharesDiversified AwayCoreVictorySharesDiversified Away100%
-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between Core and VictoryShares is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Core Alternative ETF and VictoryShares Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares Hedged and Core Alternative 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 Core Alternative ETF 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 Core Alternative i.e., Core Alternative and VictoryShares Hedged go up and down completely randomly.

Pair Corralation between Core Alternative and VictoryShares Hedged

Given the investment horizon of 90 days Core Alternative is expected to generate 1.66 times less return on investment than VictoryShares Hedged. In addition to that, Core Alternative is 1.94 times more volatile than VictoryShares Hedged Equity. It trades about 0.11 of its total potential returns per unit of risk. VictoryShares Hedged Equity is currently generating about 0.35 per unit of volatility. If you would invest  2,658  in VictoryShares Hedged Equity on November 23, 2024 and sell it today you would earn a total of  85.00  from holding VictoryShares Hedged Equity or generate 3.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Core Alternative ETF  vs.  VictoryShares Hedged Equity

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -4-3-2-10123
JavaScript chart by amCharts 3.21.15CCOR HEJD
       Timeline  
Core Alternative ETF 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Core Alternative ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Core Alternative is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb25.52626.527
VictoryShares Hedged 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in VictoryShares Hedged Equity are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward-looking indicators, VictoryShares Hedged is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2626.226.426.626.82727.227.4

Core Alternative and VictoryShares Hedged Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.0-0.72-0.44-0.16-0.01280.08960.350.630.911.19 0.51.01.5
JavaScript chart by amCharts 3.21.15CCOR HEJD
       Returns  

Pair Trading with Core Alternative and VictoryShares Hedged

The main advantage of trading using opposite Core Alternative and VictoryShares Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Alternative 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.
The idea behind Core Alternative ETF and VictoryShares Hedged Equity 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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