Correlation Between SPDR DoubleLine and Victory Portfolios

Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine and Victory Portfolios 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 SPDR DoubleLine and Victory Portfolios into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPDR DoubleLine Total and Victory Portfolios II, you can compare the effects of market volatilities on SPDR DoubleLine and Victory Portfolios 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 SPDR DoubleLine with a short position of Victory Portfolios. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and Victory Portfolios.

Diversification Opportunities for SPDR DoubleLine and Victory Portfolios

0.76

Correlation Coefficient

SPDR DoubleLine  Victory Portfolios

Poor diversification

The 3 months correlation between SPDR and Victory is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Total and Victory Portfolios II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Portfolios and SPDR DoubleLine 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 SPDR DoubleLine Total are associated (or correlated) with Victory Portfolios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Portfolios has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and Victory Portfolios go up and down completely randomly.

Pair Corralation between SPDR DoubleLine and Victory Portfolios

Given the investment horizon of 90 days SPDR DoubleLine Total is expected to generate 0.99 times more return on investment than Victory Portfolios. However, SPDR DoubleLine Total is 1.01 times less risky than Victory Portfolios. It trades about 0.17 of its potential returns per unit of risk. Victory Portfolios II is currently generating about 0.15 per unit of risk. If you would invest  3,907  in SPDR DoubleLine Total on December 28, 2024 and sell it today you would earn a total of  115.00  from holding SPDR DoubleLine Total or generate 2.94% return on investment over 90 days.

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

SPDR DoubleLine Total  vs.  Victory Portfolios II

SPDR DoubleLine Total

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR DoubleLine Total are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, SPDR DoubleLine is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Victory Portfolios

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Portfolios II are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Victory Portfolios is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SPDR DoubleLine and Victory Portfolios

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

The idea behind SPDR DoubleLine Total and Victory Portfolios II 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..