Correlation Between Victory Capital and AG Mortgage

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

Diversification Opportunities for Victory Capital and AG Mortgage

-0.15

Correlation Coefficient

Victory Capital  AG Mortgage

Good diversification

The 3 months correlation between Victory and MITN is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Victory Capital Holdings and AG Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AG Mortgage Investment 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 AG Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AG Mortgage Investment has no effect on the direction of Victory Capital i.e., Victory Capital and AG Mortgage go up and down completely randomly.

Pair Corralation between Victory Capital and AG Mortgage

Given the investment horizon of 90 days Victory Capital Holdings is expected to under-perform the AG Mortgage. In addition to that, Victory Capital is 11.15 times more volatile than AG Mortgage Investment. It trades about -0.03 of its total potential returns per unit of risk. AG Mortgage Investment is currently generating about 0.21 per unit of volatility. If you would invest  2,458  in AG Mortgage Investment on December 19, 2024 and sell it today you would earn a total of  62.00  from holding AG Mortgage Investment or generate 2.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Victory Capital Holdings  vs.  AG Mortgage Investment

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 relatively invariable basic indicators, Victory Capital is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

AG Mortgage Investment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AG Mortgage Investment are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, AG Mortgage is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Victory Capital and AG Mortgage

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

The idea behind Victory Capital Holdings and AG Mortgage Investment 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.