Correlation Between Viking Tax-free and Integrity Growth

Can any of the company-specific risk be diversified away by investing in both Viking Tax-free and Integrity Growth 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 Viking Tax-free and Integrity Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Viking Tax Free Fund and Integrity Growth Income, you can compare the effects of market volatilities on Viking Tax-free and Integrity Growth 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 Viking Tax-free with a short position of Integrity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viking Tax-free and Integrity Growth.

Diversification Opportunities for Viking Tax-free and Integrity Growth

0.38

Correlation Coefficient

Viking Tax-free  Integrity Growth

Weak diversification

The 3 months correlation between Viking and Integrity is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Viking Tax Free Fund and Integrity Growth Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrity Growth Income and Viking Tax-free 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 Viking Tax Free Fund are associated (or correlated) with Integrity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrity Growth Income has no effect on the direction of Viking Tax-free i.e., Viking Tax-free and Integrity Growth go up and down completely randomly.

Pair Corralation between Viking Tax-free and Integrity Growth

Assuming the 90 days horizon Viking Tax Free Fund is expected to generate 0.27 times more return on investment than Integrity Growth. However, Viking Tax Free Fund is 3.64 times less risky than Integrity Growth. It trades about -0.09 of its potential returns per unit of risk. Integrity Growth Income is currently generating about -0.04 per unit of risk. If you would invest  876.00  in Viking Tax Free Fund on December 30, 2024 and sell it today you would lose (14.00) from holding Viking Tax Free Fund or give up 1.6% of portfolio value over 90 days.

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

Viking Tax Free Fund  vs.  Integrity Growth Income

Viking Tax Free

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viking Tax Free Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Viking Tax-free is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Integrity Growth Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integrity Growth Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Integrity Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Viking Tax-free and Integrity Growth

The main advantage of trading using opposite Viking Tax-free and Integrity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viking Tax-free position performs unexpectedly, Integrity Growth 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 Integrity Growth will offset losses from the drop in Integrity Growth's long position.

The idea behind Viking Tax Free Fund and Integrity Growth Income 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.