Correlation Between Barings Global and Hotchkis Wiley
Can any of the company-specific risk be diversified away by investing in both Barings Global 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 Barings Global and Hotchkis Wiley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Hotchkis Wiley Mid Cap, you can compare the effects of market volatilities on Barings Global 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 Barings Global with a short position of Hotchkis Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Hotchkis Wiley.
Diversification Opportunities for Barings Global and Hotchkis Wiley
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Hotchkis is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Hotchkis Wiley Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotchkis Wiley Mid and Barings Global 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 Barings Global Floating 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 Mid has no effect on the direction of Barings Global i.e., Barings Global and Hotchkis Wiley go up and down completely randomly.
Pair Corralation between Barings Global and Hotchkis Wiley
Assuming the 90 days horizon Barings Global is expected to generate 14.26 times less return on investment than Hotchkis Wiley. But when comparing it to its historical volatility, Barings Global Floating is 20.57 times less risky than Hotchkis Wiley. It trades about 0.31 of its potential returns per unit of risk. Hotchkis Wiley Mid Cap is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 5,478 in Hotchkis Wiley Mid Cap on September 4, 2024 and sell it today you would earn a total of 280.00 from holding Hotchkis Wiley Mid Cap or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Barings Global Floating vs. Hotchkis Wiley Mid Cap
Performance |
| Timeline |
| Barings Global Floating |
| Hotchkis Wiley Mid |
Barings Global and Hotchkis Wiley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Hotchkis Wiley
The main advantage of trading using opposite Barings Global and Hotchkis Wiley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global 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.| Barings Global vs. Dreyfusstandish Global Fixed | Barings Global vs. Morningstar Global Income | Barings Global vs. Franklin Mutual Global | Barings Global vs. Ab Global Real |
| Hotchkis Wiley vs. Hw Opportunities Mp | Hotchkis Wiley vs. Hotchkis Wiley Value | Hotchkis Wiley vs. Hotchkis Wiley Value | Hotchkis Wiley vs. Hotchkis Wiley 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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