Correlation Between Cambiar International and Hodges Small
Can any of the company-specific risk be diversified away by investing in both Cambiar International 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 Cambiar International and Hodges Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambiar International Equity and Hodges Small Cap, you can compare the effects of market volatilities on Cambiar International 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 Cambiar International with a short position of Hodges Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambiar International and Hodges Small.
Diversification Opportunities for Cambiar International and Hodges Small
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cambiar and Hodges is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cambiar International Equity 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 Cambiar International 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 Cambiar International Equity 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 Cambiar International i.e., Cambiar International and Hodges Small go up and down completely randomly.
Pair Corralation between Cambiar International and Hodges Small
Assuming the 90 days horizon Cambiar International Equity is expected to generate 0.51 times more return on investment than Hodges Small. However, Cambiar International Equity is 1.94 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 2,265 in Cambiar International Equity on November 2, 2024 and sell it today you would earn a total of 450.00 from holding Cambiar International Equity or generate 19.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambiar International Equity vs. Hodges Small Cap
Performance |
| Timeline |
| Cambiar International |
| Hodges Small Cap |
Cambiar International and Hodges Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambiar International and Hodges Small
The main advantage of trading using opposite Cambiar International and Hodges Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambiar International 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.| Cambiar International vs. Causeway Emerging Markets | Cambiar International vs. Cambiar Small Cap | Cambiar International vs. Pimco Short Term Fund | Cambiar International vs. Cambiar Opportunity Fund |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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