Correlation Between Victory Capital and QT Imaging

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

Diversification Opportunities for Victory Capital and QT Imaging

-0.61

Correlation Coefficient

Victory Capital  QT Imaging

Excellent diversification

The 3 months correlation between Victory and QTI is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Victory Capital Holdings and QT Imaging Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QT Imaging Holdings 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 QT Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QT Imaging Holdings has no effect on the direction of Victory Capital i.e., Victory Capital and QT Imaging go up and down completely randomly.

Pair Corralation between Victory Capital and QT Imaging

Given the investment horizon of 90 days Victory Capital Holdings is expected to generate 0.33 times more return on investment than QT Imaging. However, Victory Capital Holdings is 3.07 times less risky than QT Imaging. It trades about 0.14 of its potential returns per unit of risk. QT Imaging Holdings is currently generating about -0.01 per unit of risk. If you would invest  5,304  in Victory Capital Holdings on September 15, 2024 and sell it today you would earn a total of  1,126  from holding Victory Capital Holdings or generate 21.23% return on investment over 90 days.

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

Victory Capital Holdings  vs.  QT Imaging Holdings

Victory Capital Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Capital Holdings are ranked lower than 11 (%) 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.

QT Imaging Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QT Imaging Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, QT Imaging is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Victory Capital and QT Imaging

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

The idea behind Victory Capital Holdings and QT Imaging Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.