Correlation Between NYSE Composite and VictoryShares Hedged
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and VictoryShares Hedged 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 NYSE Composite and VictoryShares Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and VictoryShares Hedged Equity, you can compare the effects of market volatilities on NYSE Composite and VictoryShares Hedged 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 NYSE Composite with a short position of VictoryShares Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and VictoryShares Hedged.
Diversification Opportunities for NYSE Composite and VictoryShares Hedged
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and VictoryShares is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and VictoryShares Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares Hedged and NYSE Composite 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 NYSE Composite are associated (or correlated) with VictoryShares Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares Hedged has no effect on the direction of NYSE Composite i.e., NYSE Composite and VictoryShares Hedged go up and down completely randomly.
Pair Corralation between NYSE Composite and VictoryShares Hedged
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.37 times more return on investment than VictoryShares Hedged. However, NYSE Composite is 1.37 times more volatile than VictoryShares Hedged Equity. It trades about 0.11 of its potential returns per unit of risk. VictoryShares Hedged Equity is currently generating about 0.11 per unit of risk. If you would invest 1,594,944 in NYSE Composite on September 3, 2024 and sell it today you would earn a total of 426,378 from holding NYSE Composite or generate 26.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 32.58% |
| Values | Daily Returns |
NYSE Composite vs. VictoryShares Hedged Equity
Performance |
| Timeline |
NYSE Composite and VictoryShares Hedged Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
VictoryShares Hedged Equity
Pair trading matchups for VictoryShares Hedged
Pair Trading with NYSE Composite and VictoryShares Hedged
The main advantage of trading using opposite NYSE Composite and VictoryShares Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, VictoryShares Hedged 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 VictoryShares Hedged will offset losses from the drop in VictoryShares Hedged's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| VictoryShares Hedged vs. Core Alternative ETF | VictoryShares Hedged vs. Aptus Drawdown Managed | VictoryShares Hedged vs. Amplify BlackSwan Growth | VictoryShares Hedged vs. Invesco SP 500 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |