Correlation Between F/m Investments and Victory Floating

Can any of the company-specific risk be diversified away by investing in both F/m Investments and Victory Floating 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 F/m Investments and Victory Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fm Investments Large and Victory Floating Rate, you can compare the effects of market volatilities on F/m Investments and Victory Floating 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 F/m Investments with a short position of Victory Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of F/m Investments and Victory Floating.

Diversification Opportunities for F/m Investments and Victory Floating

-0.7

Correlation Coefficient

F/m Investments  Victory Floating

Excellent diversification

The 3 months correlation between F/m and Victory is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Fm Investments Large and Victory Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Floating Rate and F/m Investments 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 Fm Investments Large are associated (or correlated) with Victory Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Floating Rate has no effect on the direction of F/m Investments i.e., F/m Investments and Victory Floating go up and down completely randomly.

Pair Corralation between F/m Investments and Victory Floating

Assuming the 90 days horizon Fm Investments Large is expected to under-perform the Victory Floating. In addition to that, F/m Investments is 9.96 times more volatile than Victory Floating Rate. It trades about -0.14 of its total potential returns per unit of risk. Victory Floating Rate is currently generating about 0.15 per unit of volatility. If you would invest  787.00  in Victory Floating Rate on December 28, 2024 and sell it today you would earn a total of  14.00  from holding Victory Floating Rate or generate 1.78% return on investment over 90 days.

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

Fm Investments Large  vs.  Victory Floating Rate

Fm Investments Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fm Investments Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Victory Floating Rate

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Floating Rate are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Victory Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with F/m Investments and Victory Floating

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

The idea behind Fm Investments Large and Victory Floating Rate 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.