Correlation Between Victory Capital and TPG

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

Diversification Opportunities for Victory Capital and TPG

0.74

Correlation Coefficient

Victory Capital  TPG

Poor diversification

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

Pair Corralation between Victory Capital and TPG

Given the investment horizon of 90 days Victory Capital Holdings is expected to generate 0.93 times more return on investment than TPG. However, Victory Capital Holdings is 1.08 times less risky than TPG. It trades about -0.05 of its potential returns per unit of risk. TPG Inc is currently generating about -0.14 per unit of risk. If you would invest  6,522  in Victory Capital Holdings on December 28, 2024 and sell it today you would lose (541.00) from holding Victory Capital Holdings or give up 8.3% of portfolio value over 90 days.

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

Victory Capital Holdings  vs.  TPG Inc

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.

TPG Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days TPG Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Victory Capital and TPG

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

The idea behind Victory Capital Holdings and TPG Inc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.