Correlation Between Victory Integrity and 1919 Financial

Can any of the company-specific risk be diversified away by investing in both Victory Integrity and 1919 Financial 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 Integrity and 1919 Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Victory Integrity Mid Cap and 1919 Financial Services, you can compare the effects of market volatilities on Victory Integrity and 1919 Financial 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 Integrity with a short position of 1919 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Integrity and 1919 Financial.

Diversification Opportunities for Victory Integrity and 1919 Financial

0.78

Correlation Coefficient

Victory Integrity  1919 Financial

Poor diversification

The 3 months correlation between Victory and 1919 is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Victory Integrity Mid Cap and 1919 Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1919 Financial Services and Victory Integrity 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 Integrity Mid Cap are associated (or correlated) with 1919 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1919 Financial Services has no effect on the direction of Victory Integrity i.e., Victory Integrity and 1919 Financial go up and down completely randomly.

Pair Corralation between Victory Integrity and 1919 Financial

Assuming the 90 days horizon Victory Integrity Mid Cap is expected to under-perform the 1919 Financial. In addition to that, Victory Integrity is 1.4 times more volatile than 1919 Financial Services. It trades about -0.29 of its total potential returns per unit of risk. 1919 Financial Services is currently generating about -0.27 per unit of volatility. If you would invest  3,314  in 1919 Financial Services on October 9, 2024 and sell it today you would lose (407.00) from holding 1919 Financial Services or give up 12.28% of portfolio value over 90 days.

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

Victory Integrity Mid Cap  vs.  1919 Financial Services

Victory Integrity Mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Victory Integrity Mid Cap 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 primary indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

1919 Financial Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1919 Financial Services has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, 1919 Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Victory Integrity and 1919 Financial

The main advantage of trading using opposite Victory Integrity and 1919 Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Integrity position performs unexpectedly, 1919 Financial 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 1919 Financial will offset losses from the drop in 1919 Financial's long position.

The idea behind Victory Integrity Mid Cap and 1919 Financial Services 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.