Correlation Between Aristotle Funds and Hewitt Money

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

By analyzing existing cross correlation between Aristotle Funds Series and Hewitt Money Market, you can compare the effects of market volatilities on Aristotle Funds and Hewitt Money 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 Aristotle Funds with a short position of Hewitt Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristotle Funds and Hewitt Money.

Diversification Opportunities for Aristotle Funds and Hewitt Money

0.0

Correlation Coefficient

Aristotle Funds  Hewitt Money

Pay attention - limited upside

The 3 months correlation between Aristotle and Hewitt is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aristotle Funds Series and Hewitt Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hewitt Money Market and Aristotle Funds 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 Aristotle Funds Series are associated (or correlated) with Hewitt Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hewitt Money Market has no effect on the direction of Aristotle Funds i.e., Aristotle Funds and Hewitt Money go up and down completely randomly.

Pair Corralation between Aristotle Funds and Hewitt Money

Assuming the 90 days horizon Aristotle Funds Series is expected to generate 1.16 times more return on investment than Hewitt Money. However, Aristotle Funds is 1.16 times more volatile than Hewitt Money Market. It trades about 0.05 of its potential returns per unit of risk. Hewitt Money Market is currently generating about 0.02 per unit of risk. If you would invest  586.00  in Aristotle Funds Series on October 4, 2024 and sell it today you would earn a total of  126.00  from holding Aristotle Funds Series or generate 21.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	86.06%
Values	Daily Returns

Aristotle Funds Series  vs.  Hewitt Money Market

Aristotle Funds Series

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Aristotle Funds Series has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Aristotle Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hewitt Money Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hewitt Money Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hewitt Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aristotle Funds and Hewitt Money

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

The idea behind Aristotle Funds Series and Hewitt Money Market 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.