Correlation Between Loblaw Companies and VictoryShares USAA
Can any of the company-specific risk be diversified away by investing in both Loblaw Companies and VictoryShares USAA 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 Loblaw Companies and VictoryShares USAA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loblaw Companies Limited and VictoryShares USAA Core, you can compare the effects of market volatilities on Loblaw Companies and VictoryShares USAA 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 Loblaw Companies with a short position of VictoryShares USAA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loblaw Companies and VictoryShares USAA.
Diversification Opportunities for Loblaw Companies and VictoryShares USAA
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Loblaw and VictoryShares is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Loblaw Companies Limited and VictoryShares USAA Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares USAA Core and Loblaw Companies 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 Loblaw Companies Limited are associated (or correlated) with VictoryShares USAA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares USAA Core has no effect on the direction of Loblaw Companies i.e., Loblaw Companies and VictoryShares USAA go up and down completely randomly.
Pair Corralation between Loblaw Companies and VictoryShares USAA
Assuming the 90 days horizon Loblaw Companies Limited is expected to generate 2.3 times more return on investment than VictoryShares USAA. However, Loblaw Companies is 2.3 times more volatile than VictoryShares USAA Core. It trades about -0.04 of its potential returns per unit of risk. VictoryShares USAA Core is currently generating about -0.22 per unit of risk. If you would invest 11,104 in Loblaw Companies Limited on January 24, 2024 and sell it today you would lose (85.00) from holding Loblaw Companies Limited or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loblaw Companies Limited vs. VictoryShares USAA Core
Performance |
| Timeline |
| Loblaw Companies |
| VictoryShares USAA Core |
Loblaw Companies and VictoryShares USAA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loblaw Companies and VictoryShares USAA
The main advantage of trading using opposite Loblaw Companies and VictoryShares USAA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loblaw Companies position performs unexpectedly, VictoryShares USAA 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 VictoryShares USAA will offset losses from the drop in VictoryShares USAA's long position.| Loblaw Companies vs. Sun Life Financial | Loblaw Companies vs. Roth CH Acquisition | Loblaw Companies vs. Signal Advance | Loblaw Companies vs. Video River Networks |
| VictoryShares USAA vs. VictoryShares USAA Core | VictoryShares USAA vs. VictoryShares International Value | VictoryShares USAA vs. VictoryShares Small Mid | VictoryShares USAA vs. VictoryShares Value Momentum |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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