Correlation Between VictoryShares USAA and Avantis Core
Can any of the company-specific risk be diversified away by investing in both VictoryShares USAA and Avantis Core 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 VictoryShares USAA and Avantis Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VictoryShares USAA Core and Avantis Core Fixed, you can compare the effects of market volatilities on VictoryShares USAA and Avantis Core 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 VictoryShares USAA with a short position of Avantis Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of VictoryShares USAA and Avantis Core.
Diversification Opportunities for VictoryShares USAA and Avantis Core
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between VictoryShares and Avantis is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares USAA Core and Avantis Core Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Core Fixed and VictoryShares USAA 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 VictoryShares USAA Core are associated (or correlated) with Avantis Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Core Fixed has no effect on the direction of VictoryShares USAA i.e., VictoryShares USAA and Avantis Core go up and down completely randomly.
Pair Corralation between VictoryShares USAA and Avantis Core
Given the investment horizon of 90 days VictoryShares USAA Core is expected to generate 0.94 times more return on investment than Avantis Core. However, VictoryShares USAA Core is 1.06 times less risky than Avantis Core. It trades about 0.05 of its potential returns per unit of risk. Avantis Core Fixed is currently generating about 0.05 per unit of risk. If you would invest 4,375 in VictoryShares USAA Core on August 31, 2024 and sell it today you would earn a total of 318.00 from holding VictoryShares USAA Core or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
VictoryShares USAA Core vs. Avantis Core Fixed
Performance |
| Timeline |
| VictoryShares USAA Core |
| Avantis Core Fixed |
VictoryShares USAA and Avantis Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VictoryShares USAA and Avantis Core
The main advantage of trading using opposite VictoryShares USAA and Avantis Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VictoryShares USAA position performs unexpectedly, Avantis Core 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 Avantis Core will offset losses from the drop in Avantis Core's long position.| VictoryShares USAA vs. VictoryShares USAA Core | VictoryShares USAA vs. VictoryShares International Value | VictoryShares USAA vs. VictoryShares Small Mid | VictoryShares USAA vs. VictoryShares Value Momentum |
| Avantis Core vs. American Century ETF | Avantis Core vs. Avantis Core Municipal | Avantis Core vs. Avantis International Equity | Avantis Core vs. Avantis Emerging Markets |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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