Correlation Between Victory Floating and Income Fund
Can any of the company-specific risk be diversified away by investing in both Victory Floating and Income Fund 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 Floating and Income Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Floating Rate and Income Fund Income, you can compare the effects of market volatilities on Victory Floating and Income Fund 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 Floating with a short position of Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Floating and Income Fund.
Diversification Opportunities for Victory Floating and Income Fund
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VICTORY and Income is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Victory Floating Rate and Income Fund Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund Income and Victory Floating 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 Floating Rate are associated (or correlated) with Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund Income has no effect on the direction of Victory Floating i.e., Victory Floating and Income Fund go up and down completely randomly.
Pair Corralation between Victory Floating and Income Fund
Assuming the 90 days horizon Victory Floating Rate is expected to generate 0.62 times more return on investment than Income Fund. However, Victory Floating Rate is 1.62 times less risky than Income Fund. It trades about 0.14 of its potential returns per unit of risk. Income Fund Income is currently generating about 0.05 per unit of risk. If you would invest 691.00 in Victory Floating Rate on August 29, 2024 and sell it today you would earn a total of 115.00 from holding Victory Floating Rate or generate 16.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory Floating Rate vs. Income Fund Income
Performance |
| Timeline |
| Victory Floating Rate |
| Income Fund Income |
Victory Floating and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Floating and Income Fund
The main advantage of trading using opposite Victory Floating and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Floating position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund's long position.The idea behind Victory Floating Rate and Income Fund Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Income Fund vs. Janus Global Technology | Income Fund vs. Janus Global Technology | Income Fund vs. Firsthand Technology Opportunities | Income Fund vs. Global Technology Portfolio |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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