Correlation Between VictoryShares THB and REX Crypto

Can any of the company-specific risk be diversified away by investing in both VictoryShares THB and REX Crypto 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 THB and REX Crypto into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VictoryShares THB Mid and REX Crypto Equity, you can compare the effects of market volatilities on VictoryShares THB and REX Crypto 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 THB with a short position of REX Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of VictoryShares THB and REX Crypto.

Diversification Opportunities for VictoryShares THB and REX Crypto

0.58

Correlation Coefficient

VictoryShares THB  REX Crypto

Very weak diversification

The 3 months correlation between VictoryShares and REX is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares THB Mid and REX Crypto Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REX Crypto Equity and VictoryShares THB 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 THB Mid are associated (or correlated) with REX Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REX Crypto Equity has no effect on the direction of VictoryShares THB i.e., VictoryShares THB and REX Crypto go up and down completely randomly.

Pair Corralation between VictoryShares THB and REX Crypto

Given the investment horizon of 90 days VictoryShares THB Mid is expected to generate 0.38 times more return on investment than REX Crypto. However, VictoryShares THB Mid is 2.63 times less risky than REX Crypto. It trades about -0.07 of its potential returns per unit of risk. REX Crypto Equity is currently generating about -0.06 per unit of risk. If you would invest  2,812  in VictoryShares THB Mid on December 22, 2024 and sell it today you would lose (103.00) from holding VictoryShares THB Mid or give up 3.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

VictoryShares THB Mid  vs.  REX Crypto Equity

VictoryShares THB Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days VictoryShares THB Mid has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, VictoryShares THB is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

REX Crypto Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days REX Crypto Equity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

Pair Trading with VictoryShares THB and REX Crypto

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

The idea behind VictoryShares THB Mid and REX Crypto Equity 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.

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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.