Correlation Between Heartland Value and City National
Can any of the company-specific risk be diversified away by investing in both Heartland Value and City National 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 Heartland Value and City National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Value Plus and City National Rochdale, you can compare the effects of market volatilities on Heartland Value and City National 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 Heartland Value with a short position of City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Value and City National.
Diversification Opportunities for Heartland Value and City National
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heartland and City is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Value Plus and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale and Heartland Value 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 Heartland Value Plus are associated (or correlated) with City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of Heartland Value i.e., Heartland Value and City National go up and down completely randomly.
Pair Corralation between Heartland Value and City National
Assuming the 90 days horizon Heartland Value Plus is expected to generate 14.09 times more return on investment than City National. However, Heartland Value is 14.09 times more volatile than City National Rochdale. It trades about 0.27 of its potential returns per unit of risk. City National Rochdale is currently generating about 0.0 per unit of risk. If you would invest 3,710 in Heartland Value Plus on September 3, 2024 and sell it today you would earn a total of 341.00 from holding Heartland Value Plus or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heartland Value Plus vs. City National Rochdale
Performance |
| Timeline |
| Heartland Value Plus |
| City National Rochdale |
Heartland Value and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Value and City National
The main advantage of trading using opposite Heartland Value and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Value position performs unexpectedly, City National 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 City National will offset losses from the drop in City National's long position.| Heartland Value vs. Heartland Value Fund | Heartland Value vs. Large Cap Fund | Heartland Value vs. Amg Yacktman Fund | Heartland Value vs. Wasatch Large Cap |
| City National vs. Amg River Road | City National vs. Heartland Value Plus | City National vs. Mutual Of America | City National vs. Boston Partners Small |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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