Correlation Between Victory Sp and Live Oak

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

By analyzing existing cross correlation between Victory Sp 500 and Live Oak Health, you can compare the effects of market volatilities on Victory Sp and Live Oak 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 Sp with a short position of Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Sp and Live Oak.

Diversification Opportunities for Victory Sp and Live Oak

-0.45

Correlation Coefficient

Victory Sp  Live Oak

Very good diversification

The 3 months correlation between Victory and Live is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Victory Sp 500 and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health and Victory Sp 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 Sp 500 are associated (or correlated) with Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of Victory Sp i.e., Victory Sp and Live Oak go up and down completely randomly.

Pair Corralation between Victory Sp and Live Oak

Assuming the 90 days horizon Victory Sp 500 is expected to generate 0.89 times more return on investment than Live Oak. However, Victory Sp 500 is 1.12 times less risky than Live Oak. It trades about 0.17 of its potential returns per unit of risk. Live Oak Health is currently generating about -0.17 per unit of risk. If you would invest  2,808  in Victory Sp 500 on September 16, 2024 and sell it today you would earn a total of  211.00  from holding Victory Sp 500 or generate 7.51% return on investment over 90 days.

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

Victory Sp 500  vs.  Live Oak Health

Victory Sp 500

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Sp 500 are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Victory Sp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Live Oak Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Live Oak Health has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Victory Sp and Live Oak

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

The idea behind Victory Sp 500 and Live Oak Health 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.