Correlation Between Brown Advisory and Hodges Fund
Can any of the company-specific risk be diversified away by investing in both Brown Advisory and Hodges Fund 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 Brown Advisory and Hodges Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brown Advisory Flexible and Hodges Fund Retail, you can compare the effects of market volatilities on Brown Advisory and Hodges Fund 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 Brown Advisory with a short position of Hodges Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brown Advisory and Hodges Fund.
Diversification Opportunities for Brown Advisory and Hodges Fund
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Brown and Hodges is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Brown Advisory Flexible and Hodges Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hodges Fund Retail and Brown Advisory 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 Brown Advisory Flexible are associated (or correlated) with Hodges Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hodges Fund Retail has no effect on the direction of Brown Advisory i.e., Brown Advisory and Hodges Fund go up and down completely randomly.
Pair Corralation between Brown Advisory and Hodges Fund
Assuming the 90 days horizon Brown Advisory is expected to generate 1.21 times less return on investment than Hodges Fund. But when comparing it to its historical volatility, Brown Advisory Flexible is 1.81 times less risky than Hodges Fund. It trades about 0.13 of its potential returns per unit of risk. Hodges Fund Retail is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,159 in Hodges Fund Retail on August 31, 2024 and sell it today you would earn a total of 2,785 from holding Hodges Fund Retail or generate 53.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Brown Advisory Flexible vs. Hodges Fund Retail
Performance |
| Timeline |
| Brown Advisory Flexible |
| Hodges Fund Retail |
Brown Advisory and Hodges Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brown Advisory and Hodges Fund
The main advantage of trading using opposite Brown Advisory and Hodges Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brown Advisory position performs unexpectedly, Hodges Fund 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 Fund will offset losses from the drop in Hodges Fund's long position.| Brown Advisory vs. Qs Large Cap | Brown Advisory vs. Enhanced Large Pany | Brown Advisory vs. Federated Kaufmann Large | Brown Advisory vs. Morningstar Unconstrained Allocation |
| Hodges Fund vs. Marsico 21st Century | Hodges Fund vs. Kinetics Paradigm Fund | Hodges Fund vs. Royce Smaller Companies Growth | Hodges Fund vs. Polaris Global Value |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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