Correlation Between Victory High and Vanguard High-yield
Can any of the company-specific risk be diversified away by investing in both Victory High and Vanguard High-yield 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 High and Vanguard High-yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory High Income and Vanguard High Yield Tax Exempt, you can compare the effects of market volatilities on Victory High and Vanguard High-yield 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 High with a short position of Vanguard High-yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory High and Vanguard High-yield.
Diversification Opportunities for Victory High and Vanguard High-yield
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Victory and Vanguard is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Victory High Income and Vanguard High Yield Tax Exempt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard High Yield and Victory High 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 High Income are associated (or correlated) with Vanguard High-yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard High Yield has no effect on the direction of Victory High i.e., Victory High and Vanguard High-yield go up and down completely randomly.
Pair Corralation between Victory High and Vanguard High-yield
Assuming the 90 days horizon Victory High Income is expected to generate 1.27 times more return on investment than Vanguard High-yield. However, Victory High is 1.27 times more volatile than Vanguard High Yield Tax Exempt. It trades about 0.08 of its potential returns per unit of risk. Vanguard High Yield Tax Exempt is currently generating about 0.08 per unit of risk. If you would invest 844.00 in Victory High Income on December 1, 2024 and sell it today you would earn a total of 121.00 from holding Victory High Income or generate 14.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory High Income vs. Vanguard High Yield Tax Exempt
Performance |
| Timeline |
| Victory High Income |
| Vanguard High Yield |
Victory High and Vanguard High-yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory High and Vanguard High-yield
The main advantage of trading using opposite Victory High and Vanguard High-yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory High position performs unexpectedly, Vanguard High-yield 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 Vanguard High-yield will offset losses from the drop in Vanguard High-yield's long position.| Victory High vs. Dunham High Yield | Victory High vs. Msift High Yield | Victory High vs. Simt High Yield | Victory High vs. Mainstay High Yield |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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