Correlation Between Victory Capital and Oxford Square

Can any of the company-specific risk be diversified away by investing in both Victory Capital and Oxford Square 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 Oxford Square 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 Oxford Square Capital, you can compare the effects of market volatilities on Victory Capital and Oxford Square 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 Oxford Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Capital and Oxford Square.

Diversification Opportunities for Victory Capital and Oxford Square

0.64

Correlation Coefficient

Victory Capital  Oxford Square

Poor diversification

The 3 months correlation between Victory and Oxford is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Victory Capital Holdings and Oxford Square Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Square Capital 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 Oxford Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Square Capital has no effect on the direction of Victory Capital i.e., Victory Capital and Oxford Square go up and down completely randomly.

Pair Corralation between Victory Capital and Oxford Square

Given the investment horizon of 90 days Victory Capital Holdings is expected to generate 4.83 times more return on investment than Oxford Square. However, Victory Capital is 4.83 times more volatile than Oxford Square Capital. It trades about 0.11 of its potential returns per unit of risk. Oxford Square Capital is currently generating about 0.08 per unit of risk. If you would invest  5,493  in Victory Capital Holdings on September 19, 2024 and sell it today you would earn a total of  868.00  from holding Victory Capital Holdings or generate 15.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Victory Capital Holdings  vs.  Oxford Square Capital

Victory Capital Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Capital Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Victory Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Oxford Square Capital

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Square Capital are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Oxford Square is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Victory Capital and Oxford Square

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

The idea behind Victory Capital Holdings and Oxford Square Capital 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.

Check out your portfolio center.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.