Correlation Between VictoryShares THB and Global X

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

Diversification Opportunities for VictoryShares THB and Global X

0.59

Correlation Coefficient

VictoryShares THB  Global X

Very weak diversification

The 3 months correlation between VictoryShares and Global is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares THB Mid and Global X Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Data 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Data has no effect on the direction of VictoryShares THB i.e., VictoryShares THB and Global X go up and down completely randomly.

Pair Corralation between VictoryShares THB and Global X

Given the investment horizon of 90 days VictoryShares THB is expected to generate 1.38 times less return on investment than Global X. But when comparing it to its historical volatility, VictoryShares THB Mid is 1.34 times less risky than Global X. It trades about 0.05 of its potential returns per unit of risk. Global X Data is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,304  in Global X Data on October 11, 2024 and sell it today you would earn a total of  424.00  from holding Global X Data or generate 32.52% return on investment over 90 days.

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

VictoryShares THB Mid  vs.  Global X Data

VictoryShares THB Mid

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Etf's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

Global X Data

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with VictoryShares THB and Global X

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

The idea behind VictoryShares THB Mid and Global X Data 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.