Correlation Between VictoryShares and First Trust

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

By analyzing existing cross correlation between VictoryShares and First Trust Mid, you can compare the effects of market volatilities on VictoryShares and First Trust 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 VictoryShares with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of VictoryShares and First Trust.

Diversification Opportunities for VictoryShares and First Trust

0.12

Correlation Coefficient

VictoryShares  First Trust

Average diversification

The 3 months correlation between VictoryShares and First is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares and First Trust Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Mid and VictoryShares 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 VictoryShares are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Mid has no effect on the direction of VictoryShares i.e., VictoryShares and First Trust go up and down completely randomly.

Pair Corralation between VictoryShares and First Trust

If you would invest  5,147  in First Trust Mid on May 16, 2025 and sell it today you would earn a total of  313.00  from holding First Trust Mid or generate 6.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

VictoryShares  vs.  First Trust Mid

VictoryShares

Risk-Adjusted Performance

Weakest

Over the last 90 days VictoryShares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VictoryShares is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

First Trust Mid

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Mid are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, First Trust may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with VictoryShares and First Trust

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

The idea behind VictoryShares and First Trust Mid 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.