Correlation Between Victory Integrity and SoFi Technologies

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

By analyzing existing cross correlation between Victory Integrity Smallmid Cap and SoFi Technologies, you can compare the effects of market volatilities on Victory Integrity and SoFi Technologies 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 SoFi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Integrity and SoFi Technologies.

Diversification Opportunities for Victory Integrity and SoFi Technologies

0.92

Correlation Coefficient

Victory Integrity  SoFi Technologies

Almost no diversification

The 3 months correlation between Victory and SoFi is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Victory Integrity Smallmid Cap and SoFi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoFi Technologies 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 Smallmid Cap are associated (or correlated) with SoFi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoFi Technologies has no effect on the direction of Victory Integrity i.e., Victory Integrity and SoFi Technologies go up and down completely randomly.

Pair Corralation between Victory Integrity and SoFi Technologies

Assuming the 90 days horizon Victory Integrity Smallmid Cap is expected to generate 0.25 times more return on investment than SoFi Technologies. However, Victory Integrity Smallmid Cap is 4.0 times less risky than SoFi Technologies. It trades about -0.07 of its potential returns per unit of risk. SoFi Technologies is currently generating about -0.07 per unit of risk. If you would invest  2,126  in Victory Integrity Smallmid Cap on December 28, 2024 and sell it today you would lose (100.00) from holding Victory Integrity Smallmid Cap or give up 4.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.36%
Values	Daily Returns

Victory Integrity Smallmid Cap  vs.  SoFi Technologies

Victory Integrity

Risk-Adjusted Performance

Very Weak

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

SoFi Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days SoFi Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Victory Integrity and SoFi Technologies

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

The idea behind Victory Integrity Smallmid Cap and SoFi 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.