Correlation Between Emerging Growth and Victory Sycamore

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

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

Diversification Opportunities for Emerging Growth and Victory Sycamore

0.6

Correlation Coefficient

Emerging Growth  Victory Sycamore

Poor diversification

The 3 months correlation between Emerging and Victory is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Growth Fund and Victory Sycamore Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Sycamore Small and Emerging Growth 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 Emerging Growth Fund are associated (or correlated) with Victory Sycamore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Sycamore Small has no effect on the direction of Emerging Growth i.e., Emerging Growth and Victory Sycamore go up and down completely randomly.

Pair Corralation between Emerging Growth and Victory Sycamore

Assuming the 90 days horizon Emerging Growth is expected to generate 2.51 times less return on investment than Victory Sycamore. In addition to that, Emerging Growth is 1.14 times more volatile than Victory Sycamore Small. It trades about 0.05 of its total potential returns per unit of risk. Victory Sycamore Small is currently generating about 0.15 per unit of volatility. If you would invest  4,138  in Victory Sycamore Small on May 1, 2025 and sell it today you would earn a total of  450.00  from holding Victory Sycamore Small or generate 10.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Emerging Growth Fund  vs.  Victory Sycamore Small

Emerging Growth

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Emerging Growth Fund are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Emerging Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Victory Sycamore Small

Risk-Adjusted Performance

Good

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

Pair Trading with Emerging Growth and Victory Sycamore

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

The idea behind Emerging Growth Fund and Victory Sycamore Small 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.