Correlation Between Victory Global and Fpa New

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

Diversification Opportunities for Victory Global and Fpa New

-0.53

Correlation Coefficient

Victory Global  Fpa New

Excellent diversification

The 3 months correlation between Victory and Fpa is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Victory Global Natural and Fpa New Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fpa New Income 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 Fpa New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fpa New Income has no effect on the direction of Victory Global i.e., Victory Global and Fpa New go up and down completely randomly.

Pair Corralation between Victory Global and Fpa New

Assuming the 90 days horizon Victory Global Natural is expected to under-perform the Fpa New. In addition to that, Victory Global is 7.61 times more volatile than Fpa New Income. It trades about -0.01 of its total potential returns per unit of risk. Fpa New Income is currently generating about 0.18 per unit of volatility. If you would invest  972.00  in Fpa New Income on December 28, 2024 and sell it today you would earn a total of  20.00  from holding Fpa New Income or generate 2.06% return on investment over 90 days.

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

Victory Global Natural  vs.  Fpa New Income

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 fairly strong basic indicators, Victory Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fpa New Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fpa New Income are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Fpa New 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 Global and Fpa New

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

The idea behind Victory Global Natural and Fpa New Income 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.