Correlation Between Victory Capital and Nuveen Dynamic

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

By analyzing existing cross correlation between Victory Capital Holdings and Nuveen Dynamic Municipal, you can compare the effects of market volatilities on Victory Capital and Nuveen Dynamic 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 Capital with a short position of Nuveen Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Capital and Nuveen Dynamic.

Diversification Opportunities for Victory Capital and Nuveen Dynamic

-0.45

Correlation Coefficient

Victory Capital  Nuveen Dynamic

Very good diversification

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

Pair Corralation between Victory Capital and Nuveen Dynamic

Given the investment horizon of 90 days Victory Capital Holdings is expected to generate 3.58 times more return on investment than Nuveen Dynamic. However, Victory Capital is 3.58 times more volatile than Nuveen Dynamic Municipal. It trades about 0.21 of its potential returns per unit of risk. Nuveen Dynamic Municipal is currently generating about 0.03 per unit of risk. If you would invest  5,242  in Victory Capital Holdings on September 3, 2024 and sell it today you would earn a total of  1,706  from holding Victory Capital Holdings or generate 32.54% return on investment over 90 days.

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

Victory Capital Holdings  vs.  Nuveen Dynamic Municipal

Victory Capital Holdings

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Capital Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Victory Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Nuveen Dynamic Municipal

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Dynamic Municipal are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Nuveen Dynamic is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Victory Capital and Nuveen Dynamic

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

The idea behind Victory Capital Holdings and Nuveen Dynamic Municipal 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.