Correlation Between Aegis Value and Victory Global

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

By analyzing existing cross correlation between Aegis Value Fund and Victory Global Natural, you can compare the effects of market volatilities on Aegis Value and Victory Global 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 Aegis Value with a short position of Victory Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegis Value and Victory Global.

Diversification Opportunities for Aegis Value and Victory Global

0.85

Correlation Coefficient

Aegis Value  Victory Global

Very poor diversification

The 3 months correlation between Aegis and Victory is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aegis Value Fund and Victory Global Natural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Global Natural and Aegis Value 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 Aegis Value Fund are associated (or correlated) with Victory Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Global Natural has no effect on the direction of Aegis Value i.e., Aegis Value and Victory Global go up and down completely randomly.

Pair Corralation between Aegis Value and Victory Global

Assuming the 90 days horizon Aegis Value Fund is expected to under-perform the Victory Global. In addition to that, Aegis Value is 1.12 times more volatile than Victory Global Natural. It trades about -0.22 of its total potential returns per unit of risk. Victory Global Natural is currently generating about -0.11 per unit of volatility. If you would invest  3,272  in Victory Global Natural on October 7, 2024 and sell it today you would lose (144.00) from holding Victory Global Natural or give up 4.4% of portfolio value over 90 days.

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

Aegis Value Fund  vs.  Victory Global Natural

Aegis Value Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Victory Global Natural

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aegis Value and Victory Global

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

The idea behind Aegis Value Fund and Victory Global Natural 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.