Correlation Between Westwood Largecap and Ancora Microcap
Can any of the company-specific risk be diversified away by investing in both Westwood Largecap and Ancora Microcap 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 Westwood Largecap and Ancora Microcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Largecap Value and Ancora Microcap Fund, you can compare the effects of market volatilities on Westwood Largecap and Ancora Microcap 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 Westwood Largecap with a short position of Ancora Microcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Largecap and Ancora Microcap.
Diversification Opportunities for Westwood Largecap and Ancora Microcap
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Westwood and Ancora is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Largecap Value and Ancora Microcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ancora Microcap and Westwood Largecap 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 Westwood Largecap Value are associated (or correlated) with Ancora Microcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ancora Microcap has no effect on the direction of Westwood Largecap i.e., Westwood Largecap and Ancora Microcap go up and down completely randomly.
Pair Corralation between Westwood Largecap and Ancora Microcap
Assuming the 90 days horizon Westwood Largecap Value is expected to generate 0.82 times more return on investment than Ancora Microcap. However, Westwood Largecap Value is 1.22 times less risky than Ancora Microcap. It trades about -0.12 of its potential returns per unit of risk. Ancora Microcap Fund is currently generating about -0.15 per unit of risk. If you would invest 1,524 in Westwood Largecap Value on December 1, 2024 and sell it today you would lose (113.00) from holding Westwood Largecap Value or give up 7.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Westwood Largecap Value vs. Ancora Microcap Fund
Performance |
Timeline |
Westwood Largecap Value |
Ancora Microcap |
Westwood Largecap and Ancora Microcap Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Westwood Largecap and Ancora Microcap
The main advantage of trading using opposite Westwood Largecap and Ancora Microcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Largecap position performs unexpectedly, Ancora Microcap 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 Ancora Microcap will offset losses from the drop in Ancora Microcap's long position.Westwood Largecap vs. Ab Municipal Bond | Westwood Largecap vs. Vanguard Intermediate Term Government | Westwood Largecap vs. Lord Abbett Intermediate | Westwood Largecap vs. Prudential California Muni |
Ancora Microcap vs. Transamerica Emerging Markets | Ancora Microcap vs. Legg Mason Western | Ancora Microcap vs. Massmutual Premier Diversified | Ancora Microcap vs. Angel Oak Ultrashort |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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