Correlation Between Hodges Small and Amg Gwk
Can any of the company-specific risk be diversified away by investing in both Hodges Small and Amg Gwk 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 Amg Gwk 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 Amg Gwk Small, you can compare the effects of market volatilities on Hodges Small and Amg Gwk 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 Amg Gwk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hodges Small and Amg Gwk.
Diversification Opportunities for Hodges Small and Amg Gwk
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hodges and Amg is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Hodges Small Cap and Amg Gwk Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk Small 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 Amg Gwk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Gwk Small has no effect on the direction of Hodges Small i.e., Hodges Small and Amg Gwk go up and down completely randomly.
Pair Corralation between Hodges Small and Amg Gwk
Assuming the 90 days horizon Hodges Small Cap is expected to generate 1.13 times more return on investment than Amg Gwk. However, Hodges Small is 1.13 times more volatile than Amg Gwk Small. It trades about 0.08 of its potential returns per unit of risk. Amg Gwk Small is currently generating about 0.07 per unit of risk. If you would invest 1,867 in Hodges Small Cap on September 2, 2024 and sell it today you would earn a total of 750.00 from holding Hodges Small Cap or generate 40.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hodges Small Cap vs. Amg Gwk Small
Performance |
| Timeline |
| Hodges Small Cap |
| Amg Gwk Small |
Hodges Small and Amg Gwk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hodges Small and Amg Gwk
The main advantage of trading using opposite Hodges Small and Amg Gwk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hodges Small position performs unexpectedly, Amg Gwk 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 Amg Gwk will offset losses from the drop in Amg Gwk'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 |
| Amg Gwk vs. T Rowe Price | Amg Gwk vs. Amg Gwk Small | Amg Gwk vs. Aberdeen Emerging Markts | Amg Gwk vs. Invesco Disciplined Equity |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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