Correlation Between American Mutual and Hotchkis Wiley
Can any of the company-specific risk be diversified away by investing in both American Mutual and Hotchkis Wiley 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 American Mutual and Hotchkis Wiley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Hotchkis Wiley Large, you can compare the effects of market volatilities on American Mutual and Hotchkis Wiley 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 American Mutual with a short position of Hotchkis Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Hotchkis Wiley.
Diversification Opportunities for American Mutual and Hotchkis Wiley
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Hotchkis is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Hotchkis Wiley Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotchkis Wiley Large and American Mutual 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 American Mutual Fund are associated (or correlated) with Hotchkis Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotchkis Wiley Large has no effect on the direction of American Mutual i.e., American Mutual and Hotchkis Wiley go up and down completely randomly.
Pair Corralation between American Mutual and Hotchkis Wiley
Assuming the 90 days horizon American Mutual is expected to generate 2.7 times less return on investment than Hotchkis Wiley. But when comparing it to its historical volatility, American Mutual Fund is 1.6 times less risky than Hotchkis Wiley. It trades about 0.12 of its potential returns per unit of risk. Hotchkis Wiley Large is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,628 in Hotchkis Wiley Large on August 28, 2024 and sell it today you would earn a total of 212.00 from holding Hotchkis Wiley Large or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Hotchkis Wiley Large
Performance |
| Timeline |
| American Mutual |
| Hotchkis Wiley Large |
American Mutual and Hotchkis Wiley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Hotchkis Wiley
The main advantage of trading using opposite American Mutual and Hotchkis Wiley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Hotchkis Wiley 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 Wiley will offset losses from the drop in Hotchkis Wiley's long position.| American Mutual vs. Qs Large Cap | American Mutual vs. Morgan Stanley Institutional | American Mutual vs. Archer Balanced Fund | American Mutual vs. Volumetric Fund Volumetric |
| Hotchkis Wiley vs. Hw Opportunities Mp | Hotchkis Wiley vs. Hotchkis Wiley Diversified | Hotchkis Wiley vs. Hotchkis Wiley Global | Hotchkis Wiley vs. Hotchkis Wiley High |
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 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.
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