Correlation Between Victory Rs and Omni Small-cap

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

By analyzing existing cross correlation between Victory Rs Small and Omni Small Cap Value, you can compare the effects of market volatilities on Victory Rs and Omni Small-cap 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 Rs with a short position of Omni Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Rs and Omni Small-cap.

Diversification Opportunities for Victory Rs and Omni Small-cap

0.98

Correlation Coefficient

Victory Rs  Omni Small-cap

Almost no diversification

The 3 months correlation between Victory and Omni is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Victory Rs Small and Omni Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Small Cap and Victory Rs 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 Rs Small are associated (or correlated) with Omni Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Small Cap has no effect on the direction of Victory Rs i.e., Victory Rs and Omni Small-cap go up and down completely randomly.

Pair Corralation between Victory Rs and Omni Small-cap

Assuming the 90 days horizon Victory Rs Small is expected to under-perform the Omni Small-cap. In addition to that, Victory Rs is 1.33 times more volatile than Omni Small Cap Value. It trades about -0.12 of its total potential returns per unit of risk. Omni Small Cap Value is currently generating about -0.13 per unit of volatility. If you would invest  1,805  in Omni Small Cap Value on December 29, 2024 and sell it today you would lose (165.00) from holding Omni Small Cap Value or give up 9.14% of portfolio value over 90 days.

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

Victory Rs Small  vs.  Omni Small Cap Value

Victory Rs Small

Risk-Adjusted Performance

Very Weak

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

Omni Small Cap

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Victory Rs and Omni Small-cap

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

The idea behind Victory Rs Small and Omni Small Cap Value 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.