Correlation Between Victory Capital and Western Union

Can any of the company-specific risk be diversified away by investing in both Victory Capital and Western Union 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 Western Union 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 Western Union Co, you can compare the effects of market volatilities on Victory Capital and Western Union 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 Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Capital and Western Union.

Diversification Opportunities for Victory Capital and Western Union

0.13

Correlation Coefficient

Victory Capital  Western Union

Average diversification

The 3 months correlation between Victory and Western is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Victory Capital Holdings and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union 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 Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of Victory Capital i.e., Victory Capital and Western Union go up and down completely randomly.

Pair Corralation between Victory Capital and Western Union

Given the investment horizon of 90 days Victory Capital Holdings is expected to under-perform the Western Union. In addition to that, Victory Capital is 1.26 times more volatile than Western Union Co. It trades about -0.07 of its total potential returns per unit of risk. Western Union Co is currently generating about -0.01 per unit of volatility. If you would invest  1,017  in Western Union Co on January 19, 2025 and sell it today you would lose (36.00) from holding Western Union Co or give up 3.54% of portfolio value over 90 days.

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

Victory Capital Holdings  vs.  Western Union Co

Victory Capital Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Capital Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Western Union

Risk-Adjusted Performance

Very Weak

Over the last 90 days Western Union Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Western Union is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Victory Capital and Western Union

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

The idea behind Victory Capital Holdings and Western Union Co 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.