Correlation Between Hotchkis Wiley and Congress Mid
Can any of the company-specific risk be diversified away by investing in both Hotchkis Wiley and Congress Mid 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 Hotchkis Wiley and Congress Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotchkis Wiley Value and Congress Mid Cap, you can compare the effects of market volatilities on Hotchkis Wiley and Congress Mid 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 Hotchkis Wiley with a short position of Congress Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotchkis Wiley and Congress Mid.
Diversification Opportunities for Hotchkis Wiley and Congress Mid
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hotchkis and Congress is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hotchkis Wiley Value and Congress Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Congress Mid Cap and Hotchkis Wiley 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 Hotchkis Wiley Value are associated (or correlated) with Congress Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Congress Mid Cap has no effect on the direction of Hotchkis Wiley i.e., Hotchkis Wiley and Congress Mid go up and down completely randomly.
Pair Corralation between Hotchkis Wiley and Congress Mid
Assuming the 90 days horizon Hotchkis Wiley is expected to generate 1.3 times less return on investment than Congress Mid. But when comparing it to its historical volatility, Hotchkis Wiley Value is 1.42 times less risky than Congress Mid. It trades about 0.16 of its potential returns per unit of risk. Congress Mid Cap is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,585 in Congress Mid Cap on August 24, 2024 and sell it today you would earn a total of 97.00 from holding Congress Mid Cap or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hotchkis Wiley Value vs. Congress Mid Cap
Performance |
| Timeline |
| Hotchkis Wiley Value |
| Congress Mid Cap |
Hotchkis Wiley and Congress Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotchkis Wiley and Congress Mid
The main advantage of trading using opposite Hotchkis Wiley and Congress Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotchkis Wiley position performs unexpectedly, Congress Mid 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 Congress Mid will offset losses from the drop in Congress Mid's long position.| Hotchkis Wiley vs. Hotchkis Wiley Value | Hotchkis Wiley vs. Hotchkis And Wiley | Hotchkis Wiley vs. Hotchkis Wiley Value | Hotchkis Wiley vs. Hotchkis Wiley Small |
| Congress Mid vs. Polen Growth Fund | Congress Mid vs. Segall Bryant Hamill | Congress Mid vs. Diamond Hill All | Congress Mid vs. Wells Fargo Index |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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