Correlation Between Federated Global and Victory Global
Can any of the company-specific risk be diversified away by investing in both Federated Global and Victory Global 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 Global and Victory Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Allocation and Victory Global Natural, you can compare the effects of market volatilities on Federated Global and Victory Global 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 Global with a short position of Victory Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Victory Global.
Diversification Opportunities for Federated Global and Victory Global
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Victory is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Victory Global Natural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Global Natural and Federated Global 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 Global Allocation are associated (or correlated) with Victory Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Global Natural has no effect on the direction of Federated Global i.e., Federated Global and Victory Global go up and down completely randomly.
Pair Corralation between Federated Global and Victory Global
Assuming the 90 days horizon Federated Global is expected to generate 2.14 times less return on investment than Victory Global. But when comparing it to its historical volatility, Federated Global Allocation is 2.68 times less risky than Victory Global. It trades about 0.09 of its potential returns per unit of risk. Victory Global Natural is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,204 in Victory Global Natural on September 3, 2024 and sell it today you would earn a total of 411.00 from holding Victory Global Natural or generate 12.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Global Allocation vs. Victory Global Natural
Performance |
| Timeline |
| Federated Global All |
| Victory Global Natural |
Federated Global and Victory Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Victory Global
The main advantage of trading using opposite Federated Global and Victory Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global position performs unexpectedly, Victory Global 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 Global will offset losses from the drop in Victory Global's long position.| Federated Global vs. Federated Max Cap Index | Federated Global vs. Federated Kaufmann Fund | Federated Global vs. Federated Strategic Income | Federated Global vs. Federated Bond Fund |
| Victory Global vs. Vanguard Materials Index | Victory Global vs. T Rowe Price | Victory Global vs. Gmo Trust | Victory Global vs. Gmo Resources |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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