Correlation Between VictoryShares THB and SPDR Galaxy
Can any of the company-specific risk be diversified away by investing in both VictoryShares THB and SPDR Galaxy 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 VictoryShares THB and SPDR Galaxy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VictoryShares THB Mid and SPDR Galaxy Hedged, you can compare the effects of market volatilities on VictoryShares THB and SPDR Galaxy 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 VictoryShares THB with a short position of SPDR Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of VictoryShares THB and SPDR Galaxy.
Diversification Opportunities for VictoryShares THB and SPDR Galaxy
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VictoryShares and SPDR is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares THB Mid and SPDR Galaxy Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Galaxy Hedged and VictoryShares THB 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 VictoryShares THB Mid are associated (or correlated) with SPDR Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Galaxy Hedged has no effect on the direction of VictoryShares THB i.e., VictoryShares THB and SPDR Galaxy go up and down completely randomly.
Pair Corralation between VictoryShares THB and SPDR Galaxy
Given the investment horizon of 90 days VictoryShares THB is expected to generate 4.83 times less return on investment than SPDR Galaxy. But when comparing it to its historical volatility, VictoryShares THB Mid is 4.1 times less risky than SPDR Galaxy. It trades about 0.22 of its potential returns per unit of risk. SPDR Galaxy Hedged is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,040 in SPDR Galaxy Hedged on September 5, 2024 and sell it today you would earn a total of 674.00 from holding SPDR Galaxy Hedged or generate 22.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
VictoryShares THB Mid vs. SPDR Galaxy Hedged
Performance |
| Timeline |
| VictoryShares THB Mid |
| SPDR Galaxy Hedged |
VictoryShares THB and SPDR Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VictoryShares THB and SPDR Galaxy
The main advantage of trading using opposite VictoryShares THB and SPDR Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VictoryShares THB position performs unexpectedly, SPDR Galaxy 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 SPDR Galaxy will offset losses from the drop in SPDR Galaxy's long position.| VictoryShares THB vs. iShares Dividend and | VictoryShares THB vs. Martin Currie Sustainable | VictoryShares THB vs. Mast Global Battery | VictoryShares THB vs. AdvisorShares Gerber Kawasaki |
| SPDR Galaxy vs. iShares Dividend and | SPDR Galaxy vs. Martin Currie Sustainable | SPDR Galaxy vs. VictoryShares THB Mid | SPDR Galaxy vs. Mast Global Battery |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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