Correlation Between Victory Munder and Value Fund

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

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

Diversification Opportunities for Victory Munder and Value Fund

0.78

Correlation Coefficient

Victory Munder  Value Fund

Poor diversification

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

Pair Corralation between Victory Munder and Value Fund

Assuming the 90 days horizon Victory Munder Multi Cap is expected to under-perform the Value Fund. In addition to that, Victory Munder is 1.26 times more volatile than Value Fund Value. It trades about -0.25 of its total potential returns per unit of risk. Value Fund Value is currently generating about -0.17 per unit of volatility. If you would invest  1,927  in Value Fund Value on December 5, 2024 and sell it today you would lose (46.00) from holding Value Fund Value or give up 2.39% of portfolio value over 90 days.

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

Victory Munder Multi Cap  vs.  Value Fund Value

Victory Munder Multi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Munder Multi 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 basic 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.

Value Fund Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Value Fund Value 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.

Pair Trading with Victory Munder and Value Fund

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

The idea behind Victory Munder Multi Cap and Value Fund 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.