Correlation Between Hodges Small and Small Cap
Can any of the company-specific risk be diversified away by investing in both Hodges Small and Small Cap 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 Small Cap 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 Small Cap Value Profund, you can compare the effects of market volatilities on Hodges Small and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hodges Small and Small Cap.
Diversification Opportunities for Hodges Small and Small Cap
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hodges and Small is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Hodges Small Cap and Small Cap Value Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Value 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Value has no effect on the direction of Hodges Small i.e., Hodges Small and Small Cap go up and down completely randomly.
Pair Corralation between Hodges Small and Small Cap
Assuming the 90 days horizon Hodges Small Cap is expected to generate 0.98 times more return on investment than Small Cap. However, Hodges Small Cap is 1.02 times less risky than Small Cap. It trades about 0.11 of its potential returns per unit of risk. Small Cap Value Profund is currently generating about 0.09 per unit of risk. If you would invest 2,150 in Hodges Small Cap on August 24, 2024 and sell it today you would earn a total of 394.00 from holding Hodges Small Cap or generate 18.33% 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. Small Cap Value Profund
Performance |
| Timeline |
| Hodges Small Cap |
| Small Cap Value |
Hodges Small and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hodges Small and Small Cap
The main advantage of trading using opposite Hodges Small and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hodges Small position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap'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 |
| Small Cap vs. Lebenthal Lisanti Small | Small Cap vs. Hodges Small Cap | Small Cap vs. Oberweis Small Cap Opportunities | Small Cap vs. HUMANA INC |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |