Correlation Between William Blair and Causeway International

Can any of the company-specific risk be diversified away by investing in both William Blair and Causeway International 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 William Blair and Causeway International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between William Blair International and Causeway International Value, you can compare the effects of market volatilities on William Blair and Causeway International 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 William Blair with a short position of Causeway International. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Blair and Causeway International.

Diversification Opportunities for William Blair and Causeway International

0.62

Correlation Coefficient

William Blair  Causeway International

Poor diversification

The 3 months correlation between William and Causeway is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding William Blair International and Causeway International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Causeway International and William Blair 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 William Blair International are associated (or correlated) with Causeway International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Causeway International has no effect on the direction of William Blair i.e., William Blair and Causeway International go up and down completely randomly.

Pair Corralation between William Blair and Causeway International

Assuming the 90 days horizon William Blair is expected to generate 8.25 times less return on investment than Causeway International. But when comparing it to its historical volatility, William Blair International is 1.01 times less risky than Causeway International. It trades about 0.02 of its potential returns per unit of risk. Causeway International Value is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,840  in Causeway International Value on December 30, 2024 and sell it today you would earn a total of  215.00  from holding Causeway International Value or generate 11.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

William Blair International  vs.  Causeway International Value

William Blair Intern

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in William Blair International are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, William Blair is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Causeway International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Causeway International Value are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Causeway International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with William Blair and Causeway International

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

The idea behind William Blair International and Causeway International Value 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.