Correlation Between Associated Capital and Victory Capital
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Victory 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 Associated Capital and Victory Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Victory Capital Holdings, you can compare the effects of market volatilities on Associated Capital and Victory 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 Associated Capital with a short position of Victory Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Victory Capital.
Diversification Opportunities for Associated Capital and Victory Capital
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Associated and Victory is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Victory Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Capital Holdings and Associated 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 Associated Capital Group are associated (or correlated) with Victory Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Capital Holdings has no effect on the direction of Associated Capital i.e., Associated Capital and Victory Capital go up and down completely randomly.
Pair Corralation between Associated Capital and Victory Capital
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 17.79 times less return on investment than Victory Capital. But when comparing it to its historical volatility, Associated Capital Group is 2.8 times less risky than Victory Capital. It trades about 0.03 of its potential returns per unit of risk. Victory Capital Holdings is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 6,038 in Victory Capital Holdings on August 23, 2024 and sell it today you would earn a total of 812.00 from holding Victory Capital Holdings or generate 13.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Victory Capital Holdings
Performance |
| Timeline |
| Associated Capital |
| Victory Capital Holdings |
Associated Capital and Victory Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Victory Capital
The main advantage of trading using opposite Associated Capital and Victory Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Victory 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 Victory Capital will offset losses from the drop in Victory Capital's long position.| Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Munivest | Associated Capital vs. SEI Investments | Associated Capital vs. SCOR PK |
| Victory Capital vs. Federated Premier Municipal | Victory Capital vs. Blackrock Muniyield | Victory Capital vs. Diamond Hill Investment | Victory Capital vs. NXG NextGen Infrastructure |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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