Correlation Between Victory Rs and Geneva Smid

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

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

Diversification Opportunities for Victory Rs and Geneva Smid

0.87

Correlation Coefficient

Victory Rs  Geneva Smid

Very poor diversification

The 3 months correlation between Victory and Geneva is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Victory Rs Small and Geneva Smid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geneva Smid Cap and Victory Rs 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 Rs Small are associated (or correlated) with Geneva Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geneva Smid Cap has no effect on the direction of Victory Rs i.e., Victory Rs and Geneva Smid go up and down completely randomly.

Pair Corralation between Victory Rs and Geneva Smid

Assuming the 90 days horizon Victory Rs Small is expected to under-perform the Geneva Smid. In addition to that, Victory Rs is 1.25 times more volatile than Geneva Smid Cap. It trades about -0.31 of its total potential returns per unit of risk. Geneva Smid Cap is currently generating about -0.31 per unit of volatility. If you would invest  1,088  in Geneva Smid Cap on December 2, 2024 and sell it today you would lose (77.00) from holding Geneva Smid Cap or give up 7.08% of portfolio value over 90 days.

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

Victory Rs Small  vs.  Geneva Smid Cap

Victory Rs Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Rs Small 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 technical and fundamental 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.

Geneva Smid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Geneva Smid Cap 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.

Pair Trading with Victory Rs and Geneva Smid

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

The idea behind Victory Rs Small and Geneva Smid 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.