Correlation Between Federated High and Victory High
Can any of the company-specific risk be diversified away by investing in both Federated High and Victory High 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 Federated High and Victory High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated High Yield and Victory High Yield, you can compare the effects of market volatilities on Federated High and Victory High 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 Federated High with a short position of Victory High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated High and Victory High.
Diversification Opportunities for Federated High and Victory High
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and VICTORY is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Federated High Yield and Victory High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory High Yield and Federated High 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 Federated High Yield are associated (or correlated) with Victory High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory High Yield has no effect on the direction of Federated High i.e., Federated High and Victory High go up and down completely randomly.
Pair Corralation between Federated High and Victory High
Assuming the 90 days horizon Federated High Yield is expected to generate 0.98 times more return on investment than Victory High. However, Federated High Yield is 1.02 times less risky than Victory High. It trades about 0.14 of its potential returns per unit of risk. Victory High Yield is currently generating about 0.1 per unit of risk. If you would invest 524.00 in Federated High Yield on November 1, 2024 and sell it today you would earn a total of 116.00 from holding Federated High Yield or generate 22.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated High Yield vs. Victory High Yield
Performance |
| Timeline |
| Federated High Yield |
| Victory High Yield |
Federated High and Victory High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated High and Victory High
The main advantage of trading using opposite Federated High and Victory High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated High position performs unexpectedly, Victory High 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 High will offset losses from the drop in Victory High's long position.| Federated High vs. American Funds Retirement | Federated High vs. Hartford Moderate Allocation | Federated High vs. Calvert Moderate Allocation | Federated High vs. Voya Retirement Moderate |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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