Correlation Between VictoryShares USAA and JIB

Can any of the company-specific risk be diversified away by investing in both VictoryShares USAA and JIB 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 JIB 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 JIB, you can compare the effects of market volatilities on VictoryShares USAA and JIB 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 JIB. Check out your portfolio center. Please also check ongoing floating volatility patterns of VictoryShares USAA and JIB.

Diversification Opportunities for VictoryShares USAA and JIB

0.61

Correlation Coefficient

VictoryShares USAA  JIB

Poor diversification

The 3 months correlation between VictoryShares and JIB is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares USAA Core and JIB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIB 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 JIB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIB has no effect on the direction of VictoryShares USAA i.e., VictoryShares USAA and JIB go up and down completely randomly.

Pair Corralation between VictoryShares USAA and JIB

If you would invest  4,154  in JIB on September 14, 2024 and sell it today you would earn a total of  0.00  from holding JIB or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	3.13%
Values	Daily Returns

VictoryShares USAA Core  vs.  JIB

VictoryShares USAA Core

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VictoryShares USAA Core has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, VictoryShares USAA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

JIB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JIB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, JIB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with VictoryShares USAA and JIB

The main advantage of trading using opposite VictoryShares USAA and JIB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VictoryShares USAA position performs unexpectedly, JIB 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 JIB will offset losses from the drop in JIB's long position.

The idea behind VictoryShares USAA Core and JIB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.