Correlation Between Victory Sycamore and Heartland Value

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

Diversification Opportunities for Victory Sycamore and Heartland Value

0.86

Correlation Coefficient

Victory Sycamore  Heartland Value

Very poor diversification

The 3 months correlation between Victory and Heartland is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Victory Sycamore Established and Heartland Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Value 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 Heartland Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Value has no effect on the direction of Victory Sycamore i.e., Victory Sycamore and Heartland Value go up and down completely randomly.

Pair Corralation between Victory Sycamore and Heartland Value

Assuming the 90 days horizon Victory Sycamore is expected to generate 1.82 times less return on investment than Heartland Value. But when comparing it to its historical volatility, Victory Sycamore Established is 1.24 times less risky than Heartland Value. It trades about 0.02 of its potential returns per unit of risk. Heartland Value Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,092  in Heartland Value Fund on December 2, 2024 and sell it today you would earn a total of  788.00  from holding Heartland Value Fund or generate 19.26% return on investment over 90 days.

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

Victory Sycamore Established  vs.  Heartland Value Fund

Victory Sycamore Est

Risk-Adjusted Performance

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 weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Heartland Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heartland Value Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Victory Sycamore and Heartland Value

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

The idea behind Victory Sycamore Established and Heartland Value Fund 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 Transaction History module to view history of all your transactions and understand their impact on performance.