Correlation Between Hotchkis Wiley and Chase Growth

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Can any of the company-specific risk be diversified away by investing in both Hotchkis Wiley and Chase Growth 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 Chase Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotchkis Wiley Large and Chase Growth Fund, you can compare the effects of market volatilities on Hotchkis Wiley and Chase Growth 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 Chase Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotchkis Wiley and Chase Growth.

Diversification Opportunities for Hotchkis Wiley and Chase Growth

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Hotchkis and Chase is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hotchkis Wiley Large and Chase Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chase Growth 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 Large are associated (or correlated) with Chase Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chase Growth has no effect on the direction of Hotchkis Wiley i.e., Hotchkis Wiley and Chase Growth go up and down completely randomly.

Pair Corralation between Hotchkis Wiley and Chase Growth

Assuming the 90 days horizon Hotchkis Wiley is expected to generate 1.3 times less return on investment than Chase Growth. In addition to that, Hotchkis Wiley is 1.21 times more volatile than Chase Growth Fund. It trades about 0.08 of its total potential returns per unit of risk. Chase Growth Fund is currently generating about 0.13 per unit of volatility. If you would invest  1,090  in Chase Growth Fund on August 26, 2024 and sell it today you would earn a total of  659.00  from holding Chase Growth Fund or generate 60.46% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Hotchkis Wiley Large  vs.  Chase Growth Fund

 Performance 
       Timeline  
Hotchkis Wiley Large 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Hotchkis Wiley Large are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Hotchkis Wiley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Chase Growth 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Chase Growth Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Chase Growth may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Hotchkis Wiley and Chase Growth Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hotchkis Wiley and Chase Growth

The main advantage of trading using opposite Hotchkis Wiley and Chase Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotchkis Wiley position performs unexpectedly, Chase Growth 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 Chase Growth will offset losses from the drop in Chase Growth's long position.
The idea behind Hotchkis Wiley Large and Chase Growth Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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