Correlation Between Large-cap Growth and Hotchkis And

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

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

Diversification Opportunities for Large-cap Growth and Hotchkis And

0.31

Correlation Coefficient

Large-cap Growth  Hotchkis And

Weak diversification

The 3 months correlation between Large-cap and Hotchkis is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Growth Profund and Hotchkis And Wiley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotchkis And Wiley and Large-cap 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 Large Cap Growth Profund are associated (or correlated) with Hotchkis And. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotchkis And Wiley has no effect on the direction of Large-cap Growth i.e., Large-cap Growth and Hotchkis And go up and down completely randomly.

Pair Corralation between Large-cap Growth and Hotchkis And

Assuming the 90 days horizon Large Cap Growth Profund is expected to generate 1.16 times more return on investment than Hotchkis And. However, Large-cap Growth is 1.16 times more volatile than Hotchkis And Wiley. It trades about 0.09 of its potential returns per unit of risk. Hotchkis And Wiley is currently generating about 0.05 per unit of risk. If you would invest  2,992  in Large Cap Growth Profund on December 4, 2024 and sell it today you would earn a total of  1,533  from holding Large Cap Growth Profund or generate 51.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

Large Cap Growth Profund  vs.  Hotchkis And Wiley

Large Cap Growth

Risk-Adjusted Performance

Very Weak

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

Hotchkis And Wiley

Risk-Adjusted Performance

Good

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

Pair Trading with Large-cap Growth and Hotchkis And

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

The idea behind Large Cap Growth Profund and Hotchkis And Wiley 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.