Correlation Between VictoryShares THB and AdvisorShares Gerber

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

Diversification Opportunities for VictoryShares THB and AdvisorShares Gerber

0.48

Correlation Coefficient

VictoryShares THB  AdvisorShares Gerber

Very weak diversification

The 3 months correlation between VictoryShares and AdvisorShares is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares THB Mid and AdvisorShares Gerber Kawasaki in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares Gerber 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 AdvisorShares Gerber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares Gerber has no effect on the direction of VictoryShares THB i.e., VictoryShares THB and AdvisorShares Gerber go up and down completely randomly.

Pair Corralation between VictoryShares THB and AdvisorShares Gerber

Given the investment horizon of 90 days VictoryShares THB Mid is expected to under-perform the AdvisorShares Gerber. But the etf apears to be less risky and, when comparing its historical volatility, VictoryShares THB Mid is 1.31 times less risky than AdvisorShares Gerber. The etf trades about -0.21 of its potential returns per unit of risk. The AdvisorShares Gerber Kawasaki is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,257  in AdvisorShares Gerber Kawasaki on December 2, 2024 and sell it today you would lose (119.00) from holding AdvisorShares Gerber Kawasaki or give up 5.27% 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.  AdvisorShares Gerber Kawasaki

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 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.

AdvisorShares Gerber

Risk-Adjusted Performance

Very Weak

Over the last 90 days AdvisorShares Gerber Kawasaki has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, AdvisorShares Gerber is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with VictoryShares THB and AdvisorShares Gerber

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

The idea behind VictoryShares THB Mid and AdvisorShares Gerber Kawasaki 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.