Correlation Between Victory Integrity and Caterpillar
Can any of the company-specific risk be diversified away by investing in both Victory Integrity and Caterpillar 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 Victory Integrity and Caterpillar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Integrity Smallmid Cap and Caterpillar, you can compare the effects of market volatilities on Victory Integrity and Caterpillar 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 Victory Integrity with a short position of Caterpillar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Integrity and Caterpillar.
Diversification Opportunities for Victory Integrity and Caterpillar
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Victory and Caterpillar is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Victory Integrity Smallmid Cap and Caterpillar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caterpillar and Victory Integrity 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 Victory Integrity Smallmid Cap are associated (or correlated) with Caterpillar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caterpillar has no effect on the direction of Victory Integrity i.e., Victory Integrity and Caterpillar go up and down completely randomly.
Pair Corralation between Victory Integrity and Caterpillar
Assuming the 90 days horizon Victory Integrity Smallmid Cap is expected to generate 0.66 times more return on investment than Caterpillar. However, Victory Integrity Smallmid Cap is 1.51 times less risky than Caterpillar. It trades about -0.03 of its potential returns per unit of risk. Caterpillar is currently generating about -0.1 per unit of risk. If you would invest 2,521 in Victory Integrity Smallmid Cap on September 13, 2024 and sell it today you would lose (16.00) from holding Victory Integrity Smallmid Cap or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Victory Integrity Smallmid Cap vs. Caterpillar
Performance |
| Timeline |
| Victory Integrity |
| Caterpillar |
Victory Integrity and Caterpillar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Integrity and Caterpillar
The main advantage of trading using opposite Victory Integrity and Caterpillar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Integrity position performs unexpectedly, Caterpillar 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 Caterpillar will offset losses from the drop in Caterpillar's long position.| Victory Integrity vs. Ashmore Emerging Markets | Victory Integrity vs. Origin Emerging Markets | Victory Integrity vs. Siit Emerging Markets | Victory Integrity vs. Pnc Emerging Markets |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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