Correlation Between The Chesapeake and Hotchkis Wiley
Can any of the company-specific risk be diversified away by investing in both The Chesapeake 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 The Chesapeake and Hotchkis Wiley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Chesapeake Growth and Hotchkis Wiley Large, you can compare the effects of market volatilities on The Chesapeake 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 The Chesapeake with a short position of Hotchkis Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Chesapeake and Hotchkis Wiley.
Diversification Opportunities for The Chesapeake and Hotchkis Wiley
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and Hotchkis is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding The Chesapeake Growth 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 The Chesapeake 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 The Chesapeake Growth 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 The Chesapeake i.e., The Chesapeake and Hotchkis Wiley go up and down completely randomly.
Pair Corralation between The Chesapeake and Hotchkis Wiley
Assuming the 90 days horizon The Chesapeake is expected to generate 1.33 times less return on investment than Hotchkis Wiley. But when comparing it to its historical volatility, The Chesapeake Growth is 1.0 times less risky than Hotchkis Wiley. It trades about 0.07 of its potential returns per unit of risk. Hotchkis Wiley Large is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,390 in Hotchkis Wiley Large on August 29, 2024 and sell it today you would earn a total of 470.00 from holding Hotchkis Wiley Large or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Chesapeake Growth vs. Hotchkis Wiley Large
Performance |
| Timeline |
| Chesapeake Growth |
| Hotchkis Wiley Large |
The Chesapeake and Hotchkis Wiley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Chesapeake and Hotchkis Wiley
The main advantage of trading using opposite The Chesapeake and Hotchkis Wiley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Chesapeake 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.| The Chesapeake vs. Emerald Growth Fund | The Chesapeake vs. Victory Rs Partners | The Chesapeake vs. Hotchkis Wiley Large | The Chesapeake vs. Chase Growth Fund |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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