Correlation Between Hodges Small and Aston/crosswind Small
Can any of the company-specific risk be diversified away by investing in both Hodges Small and Aston/crosswind 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 Hodges Small and Aston/crosswind Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hodges Small Cap and Astoncrosswind Small Cap, you can compare the effects of market volatilities on Hodges Small and Aston/crosswind 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 Hodges Small with a short position of Aston/crosswind Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hodges Small and Aston/crosswind Small.
Diversification Opportunities for Hodges Small and Aston/crosswind Small
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hodges and Aston/Crosswind is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hodges Small Cap and Astoncrosswind Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoncrosswind Small Cap and Hodges Small 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 Hodges Small Cap are associated (or correlated) with Aston/crosswind Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoncrosswind Small Cap has no effect on the direction of Hodges Small i.e., Hodges Small and Aston/crosswind Small go up and down completely randomly.
Pair Corralation between Hodges Small and Aston/crosswind Small
Assuming the 90 days horizon Hodges Small Cap is expected to under-perform the Aston/crosswind Small. In addition to that, Hodges Small is 1.47 times more volatile than Astoncrosswind Small Cap. It trades about -0.24 of its total potential returns per unit of risk. Astoncrosswind Small Cap is currently generating about -0.3 per unit of volatility. If you would invest 1,797 in Astoncrosswind Small Cap on November 28, 2024 and sell it today you would lose (100.00) from holding Astoncrosswind Small Cap or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hodges Small Cap vs. Astoncrosswind Small Cap
Performance |
| Timeline |
| Hodges Small Cap |
| Astoncrosswind Small Cap |
Hodges Small and Aston/crosswind Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hodges Small and Aston/crosswind Small
The main advantage of trading using opposite Hodges Small and Aston/crosswind Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hodges Small position performs unexpectedly, Aston/crosswind 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 Aston/crosswind Small will offset losses from the drop in Aston/crosswind Small's long position.| Hodges Small vs. Hodges Fund Retail | Hodges Small vs. Amg Southernsun Small | Hodges Small vs. Brown Advisory Growth | Hodges Small vs. Eventide Gilead Fund |
| Aston/crosswind Small vs. Baron Real Estate | Aston/crosswind Small vs. Eventide Gilead Fund | Aston/crosswind Small vs. Buffalo Emerging Opportunities | Aston/crosswind Small vs. Large Cap Growth |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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