Correlation Between Victory Integrity and American Beacon
Can any of the company-specific risk be diversified away by investing in both Victory Integrity and American Beacon 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 American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Integrity Small Cap and American Beacon Bridgeway, you can compare the effects of market volatilities on Victory Integrity and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Integrity and American Beacon.
Diversification Opportunities for Victory Integrity and American Beacon
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VICTORY and American is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Victory Integrity Small Cap and American Beacon Bridgeway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Bridgeway 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 Small Cap are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Bridgeway has no effect on the direction of Victory Integrity i.e., Victory Integrity and American Beacon go up and down completely randomly.
Pair Corralation between Victory Integrity and American Beacon
Assuming the 90 days horizon Victory Integrity Small Cap is expected to generate 1.61 times more return on investment than American Beacon. However, Victory Integrity is 1.61 times more volatile than American Beacon Bridgeway. It trades about 0.18 of its potential returns per unit of risk. American Beacon Bridgeway is currently generating about 0.19 per unit of risk. If you would invest 3,298 in Victory Integrity Small Cap on August 29, 2024 and sell it today you would earn a total of 222.00 from holding Victory Integrity Small Cap or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory Integrity Small Cap vs. American Beacon Bridgeway
Performance |
| Timeline |
| Victory Integrity Small |
| American Beacon Bridgeway |
Victory Integrity and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Integrity and American Beacon
The main advantage of trading using opposite Victory Integrity and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Integrity position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Victory Integrity vs. Towpath Technology | Victory Integrity vs. Allianzgi Technology Fund | Victory Integrity vs. Vanguard Information Technology | Victory Integrity vs. Janus Global Technology |
| American Beacon vs. Ab Centrated Growth | American Beacon vs. Disciplined Growth Fund | American Beacon vs. Select Fund R |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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