Correlation Between Hotchkis Wiley and Stringer Growth

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

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

Diversification Opportunities for Hotchkis Wiley and Stringer Growth

0.0

Correlation Coefficient

Hotchkis Wiley  Stringer Growth

Pay attention - limited upside

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

Pair Corralation between Hotchkis Wiley and Stringer Growth

If you would invest  1,273  in Stringer Growth Fund on September 12, 2024 and sell it today you would earn a total of  34.00  from holding Stringer Growth Fund or generate 2.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Hotchkis Wiley Value  vs.  Stringer Growth Fund

Hotchkis Wiley Value

Risk-Adjusted Performance

0 of 100

Very Weak

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

Stringer Growth

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stringer Growth Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Stringer Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hotchkis Wiley and Stringer Growth

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

The idea behind Hotchkis Wiley Value and Stringer Growth Fund 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.