Correlation Between GD Culture and Victory Square

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

By analyzing existing cross correlation between GD Culture Group and Victory Square Technologies, you can compare the effects of market volatilities on GD Culture and Victory 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 GD Culture with a short position of Victory Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of GD Culture and Victory Square.

Diversification Opportunities for GD Culture and Victory Square

-0.38

Correlation Coefficient

GD Culture  Victory Square

Very good diversification

The 3 months correlation between GDC and Victory is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GD Culture Group and Victory Square Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Square Techn and GD Culture 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 GD Culture Group are associated (or correlated) with Victory Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Square Techn has no effect on the direction of GD Culture i.e., GD Culture and Victory Square go up and down completely randomly.

Pair Corralation between GD Culture and Victory Square

Considering the 90-day investment horizon GD Culture Group is expected to under-perform the Victory Square. In addition to that, GD Culture is 1.55 times more volatile than Victory Square Technologies. It trades about -0.1 of its total potential returns per unit of risk. Victory Square Technologies is currently generating about 0.15 per unit of volatility. If you would invest  6.80  in Victory Square Technologies on September 2, 2024 and sell it today you would earn a total of  4.20  from holding Victory Square Technologies or generate 61.76% return on investment over 90 days.

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

GD Culture Group  vs.  Victory Square Technologies

GD Culture Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GD Culture Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Victory Square Techn

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Square Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Victory Square reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GD Culture and Victory Square

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

The idea behind GD Culture Group and Victory Square Technologies 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.