Correlation Between VictoryShares WestEnd and Defiance

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

By analyzing existing cross correlation between VictoryShares WestEnd Sector and Defiance SP 500, you can compare the effects of market volatilities on VictoryShares WestEnd and Defiance 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 WestEnd with a short position of Defiance. Check out your portfolio center. Please also check ongoing floating volatility patterns of VictoryShares WestEnd and Defiance.

Diversification Opportunities for VictoryShares WestEnd and Defiance

0.97

Correlation Coefficient

VictoryShares WestEnd  Defiance

Almost no diversification

The 3 months correlation between VictoryShares and Defiance is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares WestEnd Sector and Defiance SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance SP 500 and VictoryShares WestEnd 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 WestEnd Sector are associated (or correlated) with Defiance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance SP 500 has no effect on the direction of VictoryShares WestEnd i.e., VictoryShares WestEnd and Defiance go up and down completely randomly.

Pair Corralation between VictoryShares WestEnd and Defiance

Given the investment horizon of 90 days VictoryShares WestEnd Sector is expected to generate 1.28 times more return on investment than Defiance. However, VictoryShares WestEnd is 1.28 times more volatile than Defiance SP 500. It trades about 0.07 of its potential returns per unit of risk. Defiance SP 500 is currently generating about 0.05 per unit of risk. If you would invest  3,969  in VictoryShares WestEnd Sector on July 13, 2025 and sell it today you would earn a total of  579.00  from holding VictoryShares WestEnd Sector or generate 14.59% return on investment over 90 days.

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

VictoryShares WestEnd Sector  vs.  Defiance SP 500

VictoryShares WestEnd

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in VictoryShares WestEnd Sector are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, VictoryShares WestEnd is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Defiance SP 500

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Defiance SP 500 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Defiance is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VictoryShares WestEnd and Defiance

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

The idea behind VictoryShares WestEnd Sector and Defiance SP 500 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.