Correlation Between Victory Global and Artisan Small

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

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

Diversification Opportunities for Victory Global and Artisan Small

0.68

Correlation Coefficient

Victory Global  Artisan Small

Poor diversification

The 3 months correlation between Victory and Artisan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Victory Global Natural and Artisan Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Small Cap and Victory Global 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 Global Natural are associated (or correlated) with Artisan Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Small Cap has no effect on the direction of Victory Global i.e., Victory Global and Artisan Small go up and down completely randomly.

Pair Corralation between Victory Global and Artisan Small

Assuming the 90 days horizon Victory Global Natural is expected to generate 0.96 times more return on investment than Artisan Small. However, Victory Global Natural is 1.04 times less risky than Artisan Small. It trades about -0.14 of its potential returns per unit of risk. Artisan Small Cap is currently generating about -0.15 per unit of risk. If you would invest  3,338  in Victory Global Natural on December 1, 2024 and sell it today you would lose (380.00) from holding Victory Global Natural or give up 11.38% of portfolio value over 90 days.

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

Victory Global Natural  vs.  Artisan Small Cap

Victory Global Natural

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Global Natural has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Artisan Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artisan Small 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.

Pair Trading with Victory Global and Artisan Small

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

The idea behind Victory Global Natural and Artisan Small Cap 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.