Correlation Between Victory High and Catalyst/smh High
Can any of the company-specific risk be diversified away by investing in both Victory High and Catalyst/smh High 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 Catalyst/smh High 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 Catalystsmh High Income, you can compare the effects of market volatilities on Victory High and Catalyst/smh High 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 Catalyst/smh High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory High and Catalyst/smh High.
Diversification Opportunities for Victory High and Catalyst/smh High
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Victory and Catalyst/smh is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Victory High Yield and Catalystsmh High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystsmh High Income 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 Catalyst/smh High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystsmh High Income has no effect on the direction of Victory High i.e., Victory High and Catalyst/smh High go up and down completely randomly.
Pair Corralation between Victory High and Catalyst/smh High
Assuming the 90 days horizon Victory High is expected to generate 2.44 times less return on investment than Catalyst/smh High. But when comparing it to its historical volatility, Victory High Yield is 2.0 times less risky than Catalyst/smh High. It trades about 0.17 of its potential returns per unit of risk. Catalystsmh High Income is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 371.00 in Catalystsmh High Income on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Catalystsmh High Income or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory High Yield vs. Catalystsmh High Income
Performance |
| Timeline |
| Victory High Yield |
| Catalystsmh High Income |
Victory High and Catalyst/smh High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory High and Catalyst/smh High
The main advantage of trading using opposite Victory High and Catalyst/smh High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory High position performs unexpectedly, Catalyst/smh High 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 Catalyst/smh High will offset losses from the drop in Catalyst/smh High's long position.| Victory High vs. Deutsche Global High | Victory High vs. Victory Floating Rate | Victory High vs. Victory Global Natural | Victory High vs. High Yield Bond |
| Catalyst/smh High vs. Prudential High Yield | Catalyst/smh High vs. HUMANA INC | Catalyst/smh High vs. Aquagold International | Catalyst/smh High vs. Barloworld Ltd ADR |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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