Correlation Between Aston/crosswind Small and Hodges Small
Can any of the company-specific risk be diversified away by investing in both Aston/crosswind Small and Hodges Small 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 Aston/crosswind Small and Hodges Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astoncrosswind Small Cap and Hodges Small Cap, you can compare the effects of market volatilities on Aston/crosswind Small and Hodges Small 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 Aston/crosswind Small with a short position of Hodges Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston/crosswind Small and Hodges Small.
Diversification Opportunities for Aston/crosswind Small and Hodges Small
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aston/crosswind and Hodges is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Astoncrosswind Small Cap and Hodges Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hodges Small Cap and Aston/crosswind Small 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 Astoncrosswind Small Cap are associated (or correlated) with Hodges Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hodges Small Cap has no effect on the direction of Aston/crosswind Small i.e., Aston/crosswind Small and Hodges Small go up and down completely randomly.
Pair Corralation between Aston/crosswind Small and Hodges Small
Assuming the 90 days horizon Astoncrosswind Small Cap is expected to generate 0.73 times more return on investment than Hodges Small. However, Astoncrosswind Small Cap is 1.37 times less risky than Hodges Small. It trades about 0.05 of its potential returns per unit of risk. Hodges Small Cap is currently generating about 0.02 per unit of risk. If you would invest 1,452 in Astoncrosswind Small Cap on November 2, 2024 and sell it today you would earn a total of 358.00 from holding Astoncrosswind Small Cap or generate 24.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astoncrosswind Small Cap vs. Hodges Small Cap
Performance |
| Timeline |
| Astoncrosswind Small Cap |
| Hodges Small Cap |
Aston/crosswind Small and Hodges Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston/crosswind Small and Hodges Small
The main advantage of trading using opposite Aston/crosswind Small and Hodges Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston/crosswind Small position performs unexpectedly, Hodges Small 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 Hodges Small will offset losses from the drop in Hodges Small's long position.| Aston/crosswind Small vs. Baron Real Estate | Aston/crosswind Small vs. Eventide Gilead Fund | Aston/crosswind Small vs. Buffalo Emerging Opportunities | Aston/crosswind Small vs. Large Cap Growth |
| Hodges Small vs. Hodges Fund Retail | Hodges Small vs. Amg Southernsun Small | Hodges Small vs. Brown Advisory Growth | Hodges Small vs. Eventide Gilead Fund |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |