Correlation Between Victory Sycamore and Eagle Small

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

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

Diversification Opportunities for Victory Sycamore and Eagle Small

0.94

Correlation Coefficient

Victory Sycamore  Eagle Small

Almost no diversification

The 3 months correlation between Victory and Eagle is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Victory Sycamore Small and Eagle Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Small Cap and Victory Sycamore 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 Sycamore Small are associated (or correlated) with Eagle Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Small Cap has no effect on the direction of Victory Sycamore i.e., Victory Sycamore and Eagle Small go up and down completely randomly.

Pair Corralation between Victory Sycamore and Eagle Small

Assuming the 90 days horizon Victory Sycamore Small is expected to under-perform the Eagle Small. In addition to that, Victory Sycamore is 1.03 times more volatile than Eagle Small Cap. It trades about -0.12 of its total potential returns per unit of risk. Eagle Small Cap is currently generating about 0.05 per unit of volatility. If you would invest  2,473  in Eagle Small Cap on May 5, 2025 and sell it today you would earn a total of  24.00  from holding Eagle Small Cap or generate 0.97% return on investment over 90 days.

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

Victory Sycamore Small  vs.  Eagle Small Cap

Victory Sycamore Small

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Sycamore Small are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Victory Sycamore is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eagle Small Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Small Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Eagle Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Victory Sycamore and Eagle Small

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

The idea behind Victory Sycamore Small and Eagle Small Cap 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.