Correlation Between Victory Tax-exempt and Barings Active
Can any of the company-specific risk be diversified away by investing in both Victory Tax-exempt and Barings Active 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 Tax-exempt and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Tax Exempt Fund and Barings Active Short, you can compare the effects of market volatilities on Victory Tax-exempt and Barings Active 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 Tax-exempt with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Tax-exempt and Barings Active.
Diversification Opportunities for Victory Tax-exempt and Barings Active
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Victory and Barings is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Victory Tax Exempt Fund and Barings Active Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Active Short and Victory Tax-exempt 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 Tax Exempt Fund are associated (or correlated) with Barings Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Active Short has no effect on the direction of Victory Tax-exempt i.e., Victory Tax-exempt and Barings Active go up and down completely randomly.
Pair Corralation between Victory Tax-exempt and Barings Active
Assuming the 90 days horizon Victory Tax-exempt is expected to generate 1.25 times less return on investment than Barings Active. In addition to that, Victory Tax-exempt is 2.1 times more volatile than Barings Active Short. It trades about 0.07 of its total potential returns per unit of risk. Barings Active Short is currently generating about 0.19 per unit of volatility. If you would invest 832.00 in Barings Active Short on September 2, 2024 and sell it today you would earn a total of 93.00 from holding Barings Active Short or generate 11.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory Tax Exempt Fund vs. Barings Active Short
Performance |
| Timeline |
| Victory Tax Exempt |
| Barings Active Short |
Victory Tax-exempt and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Tax-exempt and Barings Active
The main advantage of trading using opposite Victory Tax-exempt and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Tax-exempt position performs unexpectedly, Barings Active 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 Barings Active will offset losses from the drop in Barings Active's long position.| Victory Tax-exempt vs. Amg Managers Centersquare | Victory Tax-exempt vs. Guggenheim Risk Managed | Victory Tax-exempt vs. Virtus Real Estate | Victory Tax-exempt vs. Deutsche Real Estate |
| Barings Active vs. Calamos Dynamic Convertible | Barings Active vs. Ab Bond Inflation | Barings Active vs. Blrc Sgy Mnp | Barings Active vs. Artisan High Income |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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