Correlation Between Victory Munder and Ab Growth

Can any of the company-specific risk be diversified away by investing in both Victory Munder and Ab Growth 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 Ab Growth 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 Ab Growth Fund, you can compare the effects of market volatilities on Victory Munder and Ab Growth 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 Ab Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Munder and Ab Growth.

Diversification Opportunities for Victory Munder and Ab Growth

0.77

Correlation Coefficient

Victory Munder  Ab Growth

Poor diversification

The 3 months correlation between Victory and AGRCX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Victory Munder Multi Cap and Ab Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Growth Fund 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 Ab Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Growth Fund has no effect on the direction of Victory Munder i.e., Victory Munder and Ab Growth go up and down completely randomly.

Pair Corralation between Victory Munder and Ab Growth

Assuming the 90 days horizon Victory Munder Multi Cap is expected to under-perform the Ab Growth. In addition to that, Victory Munder is 2.17 times more volatile than Ab Growth Fund. It trades about -0.27 of its total potential returns per unit of risk. Ab Growth Fund is currently generating about -0.11 per unit of volatility. If you would invest  1,065  in Ab Growth Fund on October 12, 2024 and sell it today you would lose (31.00) from holding Ab Growth Fund or give up 2.91% 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.  Ab Growth Fund

Victory Munder Multi

Risk-Adjusted Performance

0 of 100

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 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.

Ab Growth Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Growth Fund 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 fundamental 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.

Pair Trading with Victory Munder and Ab Growth

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

The idea behind Victory Munder Multi Cap and Ab Growth Fund 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.