Correlation Between Victory Capital and Foreign Trade
Can any of the company-specific risk be diversified away by investing in both Victory Capital and Foreign Trade 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 Capital and Foreign Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Capital Holdings and Foreign Trade Bank, you can compare the effects of market volatilities on Victory Capital and Foreign Trade 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 Capital with a short position of Foreign Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Capital and Foreign Trade.
Diversification Opportunities for Victory Capital and Foreign Trade
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Victory and Foreign is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Victory Capital Holdings and Foreign Trade Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Trade Bank and Victory Capital 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 Capital Holdings are associated (or correlated) with Foreign Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Trade Bank has no effect on the direction of Victory Capital i.e., Victory Capital and Foreign Trade go up and down completely randomly.
Pair Corralation between Victory Capital and Foreign Trade
Given the investment horizon of 90 days Victory Capital Holdings is expected to generate 1.11 times more return on investment than Foreign Trade. However, Victory Capital is 1.11 times more volatile than Foreign Trade Bank. It trades about 0.12 of its potential returns per unit of risk. Foreign Trade Bank is currently generating about 0.12 per unit of risk. If you would invest 2,592 in Victory Capital Holdings on August 28, 2024 and sell it today you would earn a total of 4,515 from holding Victory Capital Holdings or generate 174.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory Capital Holdings vs. Foreign Trade Bank
Performance |
| Timeline |
| Victory Capital Holdings |
| Foreign Trade Bank |
Victory Capital and Foreign Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Capital and Foreign Trade
The main advantage of trading using opposite Victory Capital and Foreign Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Capital position performs unexpectedly, Foreign Trade 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 Foreign Trade will offset losses from the drop in Foreign Trade's long position.| Victory Capital vs. Aurora Innovation | Victory Capital vs. HUMANA INC | Victory Capital vs. Aquagold International | Victory Capital vs. Barloworld Ltd ADR |
| Foreign Trade vs. Banco Santander Chile | Foreign Trade vs. Bancolombia SA ADR | Foreign Trade vs. Banco Bradesco SA | Foreign Trade vs. Credicorp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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