Correlation Between Victory Capital and Affiliated Managers

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

Diversification Opportunities for Victory Capital and Affiliated Managers

0.57

Correlation Coefficient

Victory Capital  Affiliated Managers

Very weak diversification

The 3 months correlation between Victory and Affiliated is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Victory Capital Holdings and Affiliated Managers Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers 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 Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of Victory Capital i.e., Victory Capital and Affiliated Managers go up and down completely randomly.

Pair Corralation between Victory Capital and Affiliated Managers

Given the investment horizon of 90 days Victory Capital Holdings is expected to under-perform the Affiliated Managers. In addition to that, Victory Capital is 2.26 times more volatile than Affiliated Managers Group,. It trades about -0.08 of its total potential returns per unit of risk. Affiliated Managers Group, is currently generating about -0.01 per unit of volatility. If you would invest  1,774  in Affiliated Managers Group, on December 30, 2024 and sell it today you would lose (15.00) from holding Affiliated Managers Group, or give up 0.85% of portfolio value over 90 days.

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

Victory Capital Holdings  vs.  Affiliated Managers Group,

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.

Affiliated Managers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Affiliated Managers Group, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Affiliated Managers 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 Affiliated Managers

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

The idea behind Victory Capital Holdings and Affiliated Managers Group, 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.

Check out your portfolio center.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.