Correlation Between Victory High and Pax Balanced
Can any of the company-specific risk be diversified away by investing in both Victory High and Pax Balanced 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 Pax Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory High Yield and Pax Balanced Fund, you can compare the effects of market volatilities on Victory High and Pax Balanced 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 Pax Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory High and Pax Balanced.
Diversification Opportunities for Victory High and Pax Balanced
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VICTORY and Pax is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Victory High Yield and Pax Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax Balanced 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 Yield are associated (or correlated) with Pax Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax Balanced has no effect on the direction of Victory High i.e., Victory High and Pax Balanced go up and down completely randomly.
Pair Corralation between Victory High and Pax Balanced
Assuming the 90 days horizon Victory High Yield is expected to generate 0.41 times more return on investment than Pax Balanced. However, Victory High Yield is 2.44 times less risky than Pax Balanced. It trades about 0.32 of its potential returns per unit of risk. Pax Balanced Fund is currently generating about 0.1 per unit of risk. If you would invest 547.00 in Victory High Yield on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Victory High Yield or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory High Yield vs. Pax Balanced Fund
Performance |
| Timeline |
| Victory High Yield |
| Pax Balanced |
Victory High and Pax Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory High and Pax Balanced
The main advantage of trading using opposite Victory High and Pax Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory High position performs unexpectedly, Pax Balanced 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 Pax Balanced will offset losses from the drop in Pax Balanced's long position.| Victory High vs. Prudential High Yield | Victory High vs. HUMANA INC | Victory High vs. Aquagold International | Victory High vs. Barloworld Ltd ADR |
| Pax Balanced vs. Calamos Dynamic Convertible | Pax Balanced vs. Ambrus Core Bond | Pax Balanced vs. Victory High Yield | Pax Balanced 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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