Correlation Between Federated Premier and Victory Capital
Can any of the company-specific risk be diversified away by investing in both Federated Premier and Victory Capital 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 Premier and Victory Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Premier Municipal and Victory Capital Holdings, you can compare the effects of market volatilities on Federated Premier and Victory Capital 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 Premier with a short position of Victory Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Premier and Victory Capital.
Diversification Opportunities for Federated Premier and Victory Capital
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Federated and Victory is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Federated Premier Municipal and Victory Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Capital Holdings and Federated Premier 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 Premier Municipal are associated (or correlated) with Victory Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Capital Holdings has no effect on the direction of Federated Premier i.e., Federated Premier and Victory Capital go up and down completely randomly.
Pair Corralation between Federated Premier and Victory Capital
Considering the 90-day investment horizon Federated Premier Municipal is expected to under-perform the Victory Capital. But the fund apears to be less risky and, when comparing its historical volatility, Federated Premier Municipal is 3.55 times less risky than Victory Capital. The fund trades about -0.11 of its potential returns per unit of risk. The Victory Capital Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,208 in Victory Capital Holdings on November 2, 2024 and sell it today you would earn a total of 1,409 from holding Victory Capital Holdings or generate 27.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Premier Municipal vs. Victory Capital Holdings
Performance |
| Timeline |
| Federated Premier |
| Victory Capital Holdings |
Federated Premier and Victory Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Premier and Victory Capital
The main advantage of trading using opposite Federated Premier and Victory Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Premier position performs unexpectedly, Victory Capital 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 Capital will offset losses from the drop in Victory Capital's long position.| Federated Premier vs. John Hancock Income | Federated Premier vs. MFS High Income | Federated Premier vs. MFS Investment Grade | Federated Premier vs. Blackrock Muniholdings Closed |
| Victory Capital vs. Blue Owl Capital | Victory Capital vs. TPG Inc | Victory Capital vs. Patria Investments | Victory Capital vs. Cion Investment Corp |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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