Correlation Between VictoryShares Small and VictoryShares USAA

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

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

Diversification Opportunities for VictoryShares Small and VictoryShares USAA

0.75

Correlation Coefficient

VictoryShares Small  VictoryShares USAA

Poor diversification

The 3 months correlation between VictoryShares and VictoryShares is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares Small Mid and VictoryShares USAA Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares USAA Core and VictoryShares Small 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 Small Mid are associated (or correlated) with VictoryShares USAA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares USAA Core has no effect on the direction of VictoryShares Small i.e., VictoryShares Small and VictoryShares USAA go up and down completely randomly.

Pair Corralation between VictoryShares Small and VictoryShares USAA

Given the investment horizon of 90 days VictoryShares Small Mid is expected to generate 3.6 times more return on investment than VictoryShares USAA. However, VictoryShares Small is 3.6 times more volatile than VictoryShares USAA Core. It trades about 0.12 of its potential returns per unit of risk. VictoryShares USAA Core is currently generating about 0.13 per unit of risk. If you would invest  7,770  in VictoryShares Small Mid on May 3, 2025 and sell it today you would earn a total of  580.00  from holding VictoryShares Small Mid or generate 7.46% return on investment over 90 days.

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

VictoryShares Small Mid  vs.  VictoryShares USAA Core

VictoryShares Small Mid

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VictoryShares Small Mid are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, VictoryShares Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

VictoryShares USAA Core

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VictoryShares USAA Core are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, VictoryShares USAA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with VictoryShares Small and VictoryShares USAA

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

The idea behind VictoryShares Small Mid and VictoryShares USAA Core 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.