Correlation Between Victory Floating and Icon Equity
Can any of the company-specific risk be diversified away by investing in both Victory Floating and Icon Equity 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 Icon Equity 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 Icon Equity Income, you can compare the effects of market volatilities on Victory Floating and Icon Equity 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 Icon Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Floating and Icon Equity.
Diversification Opportunities for Victory Floating and Icon Equity
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Victory and Icon is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Victory Floating Rate and Icon Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Equity 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 Icon Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Equity Income has no effect on the direction of Victory Floating i.e., Victory Floating and Icon Equity go up and down completely randomly.
Pair Corralation between Victory Floating and Icon Equity
Assuming the 90 days horizon Victory Floating is expected to generate 1.81 times less return on investment than Icon Equity. But when comparing it to its historical volatility, Victory Floating Rate is 2.85 times less risky than Icon Equity. It trades about 0.21 of its potential returns per unit of risk. Icon Equity Income is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,393 in Icon Equity Income on August 25, 2024 and sell it today you would earn a total of 328.00 from holding Icon Equity Income or generate 23.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Victory Floating Rate vs. Icon Equity Income
Performance |
| Timeline |
| Victory Floating Rate |
| Icon Equity Income |
Victory Floating and Icon Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Floating and Icon Equity
The main advantage of trading using opposite Victory Floating and Icon Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Floating position performs unexpectedly, Icon Equity 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 Icon Equity will offset losses from the drop in Icon Equity's long position.| Victory Floating vs. Income Fund Income | Victory Floating vs. Usaa Nasdaq 100 | Victory Floating vs. Victory Diversified Stock | Victory Floating vs. Intermediate Term Bond Fund |
| Icon Equity vs. Icon Equity Income | Icon Equity vs. American Beacon Balanced | Icon Equity vs. Lord Abbett Value | Icon Equity vs. Victory Floating Rate |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |