Correlation Between Victory Integrity and Victory Incore

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

By analyzing existing cross correlation between Victory Integrity Small Cap and Victory Incore Fund, you can compare the effects of market volatilities on Victory Integrity and Victory Incore 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 Victory Integrity with a short position of Victory Incore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Integrity and Victory Incore.

Diversification Opportunities for Victory Integrity and Victory Incore

-0.52

Correlation Coefficient

Victory Integrity  Victory Incore

Excellent diversification

The 3 months correlation between Victory and Victory is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Victory Integrity Small Cap and Victory Incore Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Incore and Victory Integrity 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 Victory Integrity Small Cap are associated (or correlated) with Victory Incore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Incore has no effect on the direction of Victory Integrity i.e., Victory Integrity and Victory Incore go up and down completely randomly.

Pair Corralation between Victory Integrity and Victory Incore

Assuming the 90 days horizon Victory Integrity Small Cap is expected to generate 10.48 times more return on investment than Victory Incore. However, Victory Integrity is 10.48 times more volatile than Victory Incore Fund. It trades about 0.08 of its potential returns per unit of risk. Victory Incore Fund is currently generating about -0.08 per unit of risk. If you would invest  3,250  in Victory Integrity Small Cap on September 17, 2024 and sell it today you would earn a total of  198.00  from holding Victory Integrity Small Cap or generate 6.09% return on investment over 90 days.

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

Victory Integrity Small Cap  vs.  Victory Incore Fund

Victory Integrity Small

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Integrity Small Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Victory Integrity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Victory Incore

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Victory Integrity and Victory Incore

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

The idea behind Victory Integrity Small Cap and Victory Incore Fund 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.