Correlation Between Dow Jones and Victory Select
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Victory Select 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 Dow Jones and Victory Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Victory Select Fund, you can compare the effects of market volatilities on Dow Jones and Victory Select 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 Dow Jones with a short position of Victory Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Victory Select.
Diversification Opportunities for Dow Jones and Victory Select
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Victory is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Victory Select Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Select and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Victory Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Select has no effect on the direction of Dow Jones i.e., Dow Jones and Victory Select go up and down completely randomly.
Pair Corralation between Dow Jones and Victory Select
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.98 times more return on investment than Victory Select. However, Dow Jones Industrial is 1.02 times less risky than Victory Select. It trades about 0.09 of its potential returns per unit of risk. Victory Select Fund is currently generating about 0.01 per unit of risk. If you would invest 3,857,103 in Dow Jones Industrial on November 28, 2024 and sell it today you would earn a total of 505,013 from holding Dow Jones Industrial or generate 13.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.46% |
| Values | Daily Returns |
Dow Jones Industrial vs. Victory Select Fund
Performance |
| Timeline |
Dow Jones and Victory Select Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Victory Select Fund
Pair trading matchups for Victory Select
Pair Trading with Dow Jones and Victory Select
The main advantage of trading using opposite Dow Jones and Victory Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Victory Select 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 Victory Select will offset losses from the drop in Victory Select's long position.| Dow Jones vs. Gladstone Investment | Dow Jones vs. BW Offshore Limited | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. Aperture Health |
| Victory Select vs. Vanguard Global Ex-us | Victory Select vs. Vanguard Ftse All World | Victory Select vs. Vanguard Developed Markets | Victory Select vs. Vanguard International Dividend |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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