Correlation Between Victory Strategic and New Perspective
Can any of the company-specific risk be diversified away by investing in both Victory Strategic and New Perspective 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 Strategic and New Perspective into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Strategic Allocation and New Perspective Fund, you can compare the effects of market volatilities on Victory Strategic and New Perspective 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 Strategic with a short position of New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Strategic and New Perspective.
Diversification Opportunities for Victory Strategic and New Perspective
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VICTORY and New is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Victory Strategic Allocation and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective and Victory Strategic 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 Strategic Allocation are associated (or correlated) with New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Victory Strategic i.e., Victory Strategic and New Perspective go up and down completely randomly.
Pair Corralation between Victory Strategic and New Perspective
Assuming the 90 days horizon Victory Strategic Allocation is expected to generate 0.64 times more return on investment than New Perspective. However, Victory Strategic Allocation is 1.57 times less risky than New Perspective. It trades about 0.15 of its potential returns per unit of risk. New Perspective Fund is currently generating about 0.04 per unit of risk. If you would invest 1,998 in Victory Strategic Allocation on August 31, 2024 and sell it today you would earn a total of 29.00 from holding Victory Strategic Allocation or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory Strategic Allocation vs. New Perspective Fund
Performance |
| Timeline |
| Victory Strategic |
| New Perspective |
Victory Strategic and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Strategic and New Perspective
The main advantage of trading using opposite Victory Strategic and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Strategic position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Victory Strategic vs. HUMANA INC | Victory Strategic vs. SCOR PK | Victory Strategic vs. Aquagold International | Victory Strategic vs. Thrivent High Yield |
| New Perspective vs. Pace Large Growth | New Perspective vs. Old Westbury Large | New Perspective vs. Victory Strategic Allocation | New Perspective vs. Strategic Allocation Aggressive |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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