Correlation Between FT Cboe and VictoryShares WestEnd

Can any of the company-specific risk be diversified away by investing in both FT Cboe and VictoryShares WestEnd 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 FT Cboe and VictoryShares WestEnd into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FT Cboe Vest and VictoryShares WestEnd Sector, you can compare the effects of market volatilities on FT Cboe and VictoryShares WestEnd 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 FT Cboe with a short position of VictoryShares WestEnd. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Cboe and VictoryShares WestEnd.

Diversification Opportunities for FT Cboe and VictoryShares WestEnd

0.93

Correlation Coefficient

FT Cboe  VictoryShares WestEnd

Almost no diversification

The 3 months correlation between BUFZ and VictoryShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding FT Cboe Vest and VictoryShares WestEnd Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares WestEnd and FT Cboe 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 FT Cboe Vest are associated (or correlated) with VictoryShares WestEnd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares WestEnd has no effect on the direction of FT Cboe i.e., FT Cboe and VictoryShares WestEnd go up and down completely randomly.

Pair Corralation between FT Cboe and VictoryShares WestEnd

Given the investment horizon of 90 days FT Cboe is expected to generate 2.39 times less return on investment than VictoryShares WestEnd. But when comparing it to its historical volatility, FT Cboe Vest is 2.52 times less risky than VictoryShares WestEnd. It trades about 0.11 of its potential returns per unit of risk. VictoryShares WestEnd Sector is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,460  in VictoryShares WestEnd Sector on August 27, 2025 and sell it today you would earn a total of  211.00  from holding VictoryShares WestEnd Sector or generate 4.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

FT Cboe Vest  vs.  VictoryShares WestEnd Sector

FT Cboe Vest

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in FT Cboe Vest are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, FT Cboe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

VictoryShares WestEnd

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in VictoryShares WestEnd Sector are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, VictoryShares WestEnd is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with FT Cboe and VictoryShares WestEnd

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

The idea behind FT Cboe Vest and VictoryShares WestEnd Sector 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.