Correlation Between VictoryShares THB and Gabelli ETFs

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

Diversification Opportunities for VictoryShares THB and Gabelli ETFs

0.78

Correlation Coefficient

VictoryShares THB  Gabelli ETFs

Poor diversification

The 3 months correlation between VictoryShares and Gabelli is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares THB Mid and Gabelli ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli ETFs Trust 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 Gabelli ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli ETFs Trust has no effect on the direction of VictoryShares THB i.e., VictoryShares THB and Gabelli ETFs go up and down completely randomly.

Pair Corralation between VictoryShares THB and Gabelli ETFs

Given the investment horizon of 90 days VictoryShares THB Mid is expected to under-perform the Gabelli ETFs. In addition to that, VictoryShares THB is 1.0 times more volatile than Gabelli ETFs Trust. It trades about -0.35 of its total potential returns per unit of risk. Gabelli ETFs Trust is currently generating about -0.3 per unit of volatility. If you would invest  2,899  in Gabelli ETFs Trust on October 12, 2024 and sell it today you would lose (164.00) from holding Gabelli ETFs Trust or give up 5.66% of portfolio value over 90 days.

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

VictoryShares THB Mid  vs.  Gabelli ETFs Trust

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.

Gabelli ETFs Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli ETFs Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Gabelli ETFs 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 Gabelli ETFs

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

The idea behind VictoryShares THB Mid and Gabelli ETFs Trust 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.