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 Funds, 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

0.13

Correlation Coefficient

VictoryShares THB  Global X

Average diversification

The 3 months correlation between VictoryShares and Global is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares THB Mid and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 Funds 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 Mid is expected to generate 0.94 times more return on investment than Global X. However, VictoryShares THB Mid is 1.07 times less risky than Global X. It trades about 0.08 of its potential returns per unit of risk. Global X Funds is currently generating about 0.02 per unit of risk. If you would invest  2,195  in VictoryShares THB Mid on September 5, 2024 and sell it today you would earn a total of  871.00  from holding VictoryShares THB Mid or generate 39.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	79.39%
Values	Daily Returns

VictoryShares THB Mid  vs.  Global X Funds

VictoryShares THB Mid

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VictoryShares THB Mid are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, VictoryShares THB may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Global X Funds

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Global X is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Funds 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.