Correlation Between Victory Strategic and Artisan Value

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

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

Diversification Opportunities for Victory Strategic and Artisan Value

0.74

Correlation Coefficient

Victory Strategic  Artisan Value

Poor diversification

The 3 months correlation between Victory and ARTISAN is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Victory Strategic Allocation and Artisan Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Value and Victory Strategic 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 Strategic Allocation are associated (or correlated) with Artisan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Value has no effect on the direction of Victory Strategic i.e., Victory Strategic and Artisan Value go up and down completely randomly.

Pair Corralation between Victory Strategic and Artisan Value

Assuming the 90 days horizon Victory Strategic Allocation is expected to under-perform the Artisan Value. But the mutual fund apears to be less risky and, when comparing its historical volatility, Victory Strategic Allocation is 1.31 times less risky than Artisan Value. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Artisan Value Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,425  in Artisan Value Fund on December 30, 2024 and sell it today you would earn a total of  25.00  from holding Artisan Value Fund or generate 1.75% return on investment over 90 days.

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

Victory Strategic Allocation  vs.  Artisan Value Fund

Victory Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Strategic Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Victory Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Artisan Value

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Value Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Artisan Value 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 Strategic and Artisan Value

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

The idea behind Victory Strategic Allocation and Artisan Value 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..