Correlation Between Ambrus Core and Victory Integrity

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

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

Diversification Opportunities for Ambrus Core and Victory Integrity

-0.46

Correlation Coefficient

Ambrus Core  Victory Integrity

Very good diversification

The 3 months correlation between Ambrus and Victory is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ambrus Core Bond and Victory Integrity Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Integrity Mid and Ambrus Core 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 Ambrus Core Bond are associated (or correlated) with Victory Integrity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Integrity Mid has no effect on the direction of Ambrus Core i.e., Ambrus Core and Victory Integrity go up and down completely randomly.

Pair Corralation between Ambrus Core and Victory Integrity

Assuming the 90 days horizon Ambrus Core Bond is expected to generate 0.09 times more return on investment than Victory Integrity. However, Ambrus Core Bond is 11.11 times less risky than Victory Integrity. It trades about -0.11 of its potential returns per unit of risk. Victory Integrity Mid Cap is currently generating about -0.08 per unit of risk. If you would invest  1,006  in Ambrus Core Bond on September 18, 2024 and sell it today you would lose (12.00) from holding Ambrus Core Bond or give up 1.19% of portfolio value over 90 days.

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

Ambrus Core Bond  vs.  Victory Integrity Mid Cap

Ambrus Core Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Victory Integrity Mid

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Victory Integrity Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary 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 Ambrus Core and Victory Integrity

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

The idea behind Ambrus Core Bond and Victory Integrity Mid Cap 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.