Correlation Between Advisors Capital and Westwood Largecap
Can any of the company-specific risk be diversified away by investing in both Advisors Capital and Westwood Largecap 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 Advisors Capital and Westwood Largecap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advisors Capital Tactical and Westwood Largecap Value, you can compare the effects of market volatilities on Advisors Capital and Westwood Largecap 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 Advisors Capital with a short position of Westwood Largecap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advisors Capital and Westwood Largecap.
Diversification Opportunities for Advisors Capital and Westwood Largecap
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advisors and Westwood is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Advisors Capital Tactical and Westwood Largecap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood Largecap Value and Advisors Capital 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 Advisors Capital Tactical are associated (or correlated) with Westwood Largecap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood Largecap Value has no effect on the direction of Advisors Capital i.e., Advisors Capital and Westwood Largecap go up and down completely randomly.
Pair Corralation between Advisors Capital and Westwood Largecap
Assuming the 90 days horizon Advisors Capital is expected to generate 2.9 times less return on investment than Westwood Largecap. But when comparing it to its historical volatility, Advisors Capital Tactical is 2.16 times less risky than Westwood Largecap. It trades about 0.1 of its potential returns per unit of risk. Westwood Largecap Value is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,383 in Westwood Largecap Value on September 2, 2024 and sell it today you would earn a total of 159.00 from holding Westwood Largecap Value or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advisors Capital Tactical vs. Westwood Largecap Value
Performance |
| Timeline |
| Advisors Capital Tactical |
| Westwood Largecap Value |
Advisors Capital and Westwood Largecap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advisors Capital and Westwood Largecap
The main advantage of trading using opposite Advisors Capital and Westwood Largecap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advisors Capital position performs unexpectedly, Westwood Largecap 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 Westwood Largecap will offset losses from the drop in Westwood Largecap's long position.| Advisors Capital vs. Emerging Markets Fund | Advisors Capital vs. Equity Growth Fund | Advisors Capital vs. Global Growth Fund | Advisors Capital vs. Small Pany Fund |
| Westwood Largecap vs. The Hartford Small | Westwood Largecap vs. Baird Smallmid Cap | Westwood Largecap vs. Champlain Small | Westwood Largecap vs. Small Pany Growth |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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