Correlation Between Victory Capital and Enova International

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

By analyzing existing cross correlation between Victory Capital Holdings and Enova International, you can compare the effects of market volatilities on Victory Capital and Enova International 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 Capital with a short position of Enova International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Capital and Enova International.

Diversification Opportunities for Victory Capital and Enova International

0.8

Correlation Coefficient

Victory Capital  Enova International

Very poor diversification

The 3 months correlation between Victory and Enova is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Victory Capital Holdings and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International and Victory Capital 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 Capital Holdings are associated (or correlated) with Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of Victory Capital i.e., Victory Capital and Enova International go up and down completely randomly.

Pair Corralation between Victory Capital and Enova International

Given the investment horizon of 90 days Victory Capital Holdings is expected to under-perform the Enova International. In addition to that, Victory Capital is 1.05 times more volatile than Enova International. It trades about -0.05 of its total potential returns per unit of risk. Enova International is currently generating about 0.03 per unit of volatility. If you would invest  9,694  in Enova International on December 29, 2024 and sell it today you would earn a total of  234.00  from holding Enova International or generate 2.41% return on investment over 90 days.

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

Victory Capital Holdings  vs.  Enova International

Victory Capital Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Capital Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Enova International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enova International are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Enova International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Victory Capital and Enova International

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

The idea behind Victory Capital Holdings and Enova International 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.