Correlation Between Floating Rate and Victory Floating
Can any of the company-specific risk be diversified away by investing in both Floating Rate and Victory Floating 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 Floating Rate and Victory Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floating Rate Fund and Victory Floating Rate, you can compare the effects of market volatilities on Floating Rate and Victory Floating 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 Floating Rate with a short position of Victory Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floating Rate and Victory Floating.
Diversification Opportunities for Floating Rate and Victory Floating
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Floating and Victory is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Floating Rate Fund and Victory Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Floating Rate and Floating Rate 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 Floating Rate Fund are associated (or correlated) with Victory Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Floating Rate has no effect on the direction of Floating Rate i.e., Floating Rate and Victory Floating go up and down completely randomly.
Pair Corralation between Floating Rate and Victory Floating
Assuming the 90 days horizon Floating Rate Fund is expected to generate 0.85 times more return on investment than Victory Floating. However, Floating Rate Fund is 1.18 times less risky than Victory Floating. It trades about 0.22 of its potential returns per unit of risk. Victory Floating Rate is currently generating about 0.18 per unit of risk. If you would invest 741.00 in Floating Rate Fund on September 1, 2024 and sell it today you would earn a total of 78.00 from holding Floating Rate Fund or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floating Rate Fund vs. Victory Floating Rate
Performance |
| Timeline |
| Floating Rate |
| Victory Floating Rate |
Floating Rate and Victory Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floating Rate and Victory Floating
The main advantage of trading using opposite Floating Rate and Victory Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floating Rate position performs unexpectedly, Victory Floating 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 Floating will offset losses from the drop in Victory Floating's long position.| Floating Rate vs. Lord Abbett Trust | Floating Rate vs. Lord Abbett Trust | Floating Rate vs. Lord Abbett Focused | Floating Rate vs. Floating Rate Fund |
| Victory Floating vs. Income Fund Income | Victory Floating vs. Usaa Nasdaq 100 | Victory Floating vs. Victory Diversified Stock | Victory Floating vs. Intermediate Term Bond Fund |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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