Correlation Between Matson Money and Westwood Smidcap
Can any of the company-specific risk be diversified away by investing in both Matson Money and Westwood Smidcap 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 Matson Money and Westwood Smidcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matson Money Equity and Westwood Smidcap Fund, you can compare the effects of market volatilities on Matson Money and Westwood Smidcap 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 Matson Money with a short position of Westwood Smidcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Westwood Smidcap.
Diversification Opportunities for Matson Money and Westwood Smidcap
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Matson and Westwood is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Westwood Smidcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood Smidcap and Matson Money 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 Matson Money Equity are associated (or correlated) with Westwood Smidcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood Smidcap has no effect on the direction of Matson Money i.e., Matson Money and Westwood Smidcap go up and down completely randomly.
Pair Corralation between Matson Money and Westwood Smidcap
Assuming the 90 days horizon Matson Money Equity is expected to generate 0.98 times more return on investment than Westwood Smidcap. However, Matson Money Equity is 1.02 times less risky than Westwood Smidcap. It trades about 0.3 of its potential returns per unit of risk. Westwood Smidcap Fund is currently generating about 0.26 per unit of risk. If you would invest 3,495 in Matson Money Equity on September 4, 2024 and sell it today you would earn a total of 292.00 from holding Matson Money Equity or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matson Money Equity vs. Westwood Smidcap Fund
Performance |
| Timeline |
| Matson Money Equity |
| Westwood Smidcap |
Matson Money and Westwood Smidcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matson Money and Westwood Smidcap
The main advantage of trading using opposite Matson Money and Westwood Smidcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, Westwood Smidcap 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 Westwood Smidcap will offset losses from the drop in Westwood Smidcap's long position.| Matson Money vs. Western Asset High | Matson Money vs. T Rowe Price | Matson Money vs. Siit High Yield | Matson Money vs. Calvert High Yield |
| Westwood Smidcap vs. Matson Money Equity | Westwood Smidcap vs. Franklin Government Money | Westwood Smidcap vs. Lord Abbett Emerging | Westwood Smidcap vs. Janus Investment |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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