Correlation Between Victory Sycamore and Eagle Capital

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

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

Diversification Opportunities for Victory Sycamore and Eagle Capital

-0.24

Correlation Coefficient

Victory Sycamore  Eagle Capital

Very good diversification

The 3 months correlation between Victory and Eagle is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Victory Sycamore Established and Eagle Capital Appreciation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Capital Apprec and Victory Sycamore 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 Sycamore Established are associated (or correlated) with Eagle Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Capital Apprec has no effect on the direction of Victory Sycamore i.e., Victory Sycamore and Eagle Capital go up and down completely randomly.

Pair Corralation between Victory Sycamore and Eagle Capital

Assuming the 90 days horizon Victory Sycamore is expected to generate 11.52 times less return on investment than Eagle Capital. But when comparing it to its historical volatility, Victory Sycamore Established is 1.22 times less risky than Eagle Capital. It trades about 0.01 of its potential returns per unit of risk. Eagle Capital Appreciation is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3,658  in Eagle Capital Appreciation on September 28, 2024 and sell it today you would earn a total of  2,711  from holding Eagle Capital Appreciation or generate 74.11% return on investment over 90 days.

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

Victory Sycamore Established  vs.  Eagle Capital Appreciation

Victory Sycamore Est

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Victory Sycamore Established has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Eagle Capital Apprec

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Capital Appreciation are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Eagle Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Victory Sycamore and Eagle Capital

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

The idea behind Victory Sycamore Established and Eagle Capital Appreciation 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.