Correlation Between Hotchkis Wiley and Qs Growth

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

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

Diversification Opportunities for Hotchkis Wiley and Qs Growth

0.01

Correlation Coefficient

Hotchkis Wiley  Qs Growth

Significant diversification

The 3 months correlation between Hotchkis and LANIX is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hotchkis Wiley International and Qs Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Growth Fund 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 International are associated (or correlated) with Qs Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Growth Fund has no effect on the direction of Hotchkis Wiley i.e., Hotchkis Wiley and Qs Growth go up and down completely randomly.

Pair Corralation between Hotchkis Wiley and Qs Growth

Assuming the 90 days horizon Hotchkis Wiley International is expected to generate 0.78 times more return on investment than Qs Growth. However, Hotchkis Wiley International is 1.29 times less risky than Qs Growth. It trades about 0.17 of its potential returns per unit of risk. Qs Growth Fund is currently generating about -0.1 per unit of risk. If you would invest  935.00  in Hotchkis Wiley International on December 21, 2024 and sell it today you would earn a total of  78.00  from holding Hotchkis Wiley International or generate 8.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Hotchkis Wiley International  vs.  Qs Growth Fund

Hotchkis Wiley Inter

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hotchkis Wiley International are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Hotchkis Wiley may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Qs Growth Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qs Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Hotchkis Wiley and Qs Growth

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

The idea behind Hotchkis Wiley International and Qs 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.