Correlation Between Victory Capital and Patria Investments
Can any of the company-specific risk be diversified away by investing in both Victory Capital and Patria Investments 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 Patria Investments 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 Patria Investments, you can compare the effects of market volatilities on Victory Capital and Patria Investments 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 Patria Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Capital and Patria Investments.
Diversification Opportunities for Victory Capital and Patria Investments
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Victory and Patria is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Victory Capital Holdings and Patria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patria Investments 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 Patria Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patria Investments has no effect on the direction of Victory Capital i.e., Victory Capital and Patria Investments go up and down completely randomly.
Pair Corralation between Victory Capital and Patria Investments
Given the investment horizon of 90 days Victory Capital Holdings is expected to generate 2.05 times more return on investment than Patria Investments. However, Victory Capital is 2.05 times more volatile than Patria Investments. It trades about 0.25 of its potential returns per unit of risk. Patria Investments is currently generating about 0.25 per unit of risk. If you would invest 6,058 in Victory Capital Holdings on August 28, 2024 and sell it today you would earn a total of 1,049 from holding Victory Capital Holdings or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory Capital Holdings vs. Patria Investments
Performance |
| Timeline |
| Victory Capital Holdings |
| Patria Investments |
Victory Capital and Patria Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Capital and Patria Investments
The main advantage of trading using opposite Victory Capital and Patria Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Capital position performs unexpectedly, Patria Investments 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 Patria Investments will offset losses from the drop in Patria Investments' long position.| Victory Capital vs. Federated Premier Municipal | Victory Capital vs. Blackrock Muniyield | Victory Capital vs. Diamond Hill Investment | Victory Capital vs. NXG NextGen Infrastructure |
| Patria Investments vs. Invesco Advantage MIT | Patria Investments vs. Invesco Municipal Trust | Patria Investments vs. Invesco California Value | Patria Investments vs. Brightsphere Investment Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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