Correlation Between Victory High and Western Assets
Can any of the company-specific risk be diversified away by investing in both Victory High and Western Assets 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 Western Assets 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 Western Assets Emerging, you can compare the effects of market volatilities on Victory High and Western Assets 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 Western Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory High and Western Assets.
Diversification Opportunities for Victory High and Western Assets
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VICTORY and Western is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Victory High Yield and Western Assets Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Assets Emerging 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 Western Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Assets Emerging has no effect on the direction of Victory High i.e., Victory High and Western Assets go up and down completely randomly.
Pair Corralation between Victory High and Western Assets
Assuming the 90 days horizon Victory High Yield is expected to generate 0.55 times more return on investment than Western Assets. However, Victory High Yield is 1.8 times less risky than Western Assets. It trades about 0.32 of its potential returns per unit of risk. Western Assets Emerging is currently generating about 0.02 per unit of risk. If you would invest 547.00 in Victory High Yield on August 29, 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. Western Assets Emerging
Performance |
| Timeline |
| Victory High Yield |
| Western Assets Emerging |
Victory High and Western Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory High and Western Assets
The main advantage of trading using opposite Victory High and Western Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory High position performs unexpectedly, Western Assets 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 Western Assets will offset losses from the drop in Western Assets' long position.| Victory High vs. Prudential High Yield | Victory High vs. HUMANA INC | Victory High vs. Aquagold International | Victory High vs. Barloworld Ltd ADR |
| Western Assets vs. Vanguard High Yield Tax Exempt | Western Assets vs. Victory High Yield | Western Assets vs. Artisan High Income | Western Assets vs. Blrc Sgy Mnp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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