Correlation Between Hotchkis Wiley and The Chesapeake
Can any of the company-specific risk be diversified away by investing in both Hotchkis Wiley and The Chesapeake 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 The Chesapeake 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 The Chesapeake Growth, you can compare the effects of market volatilities on Hotchkis Wiley and The Chesapeake 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 The Chesapeake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotchkis Wiley and The Chesapeake.
Diversification Opportunities for Hotchkis Wiley and The Chesapeake
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hotchkis and The is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hotchkis Wiley Large and The Chesapeake Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake 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 The Chesapeake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Growth has no effect on the direction of Hotchkis Wiley i.e., Hotchkis Wiley and The Chesapeake go up and down completely randomly.
Pair Corralation between Hotchkis Wiley and The Chesapeake
Assuming the 90 days horizon Hotchkis Wiley Large is expected to generate 1.42 times more return on investment than The Chesapeake. However, Hotchkis Wiley is 1.42 times more volatile than The Chesapeake Growth. It trades about 0.06 of its potential returns per unit of risk. The Chesapeake Growth is currently generating about 0.07 per unit of risk. If you would invest 3,548 in Hotchkis Wiley Large on August 26, 2024 and sell it today you would earn a total of 1,294 from holding Hotchkis Wiley Large or generate 36.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotchkis Wiley Large vs. The Chesapeake Growth
Performance |
| Timeline |
| Hotchkis Wiley Large |
| Chesapeake Growth |
Hotchkis Wiley and The Chesapeake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotchkis Wiley and The Chesapeake
The main advantage of trading using opposite Hotchkis Wiley and The Chesapeake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotchkis Wiley position performs unexpectedly, The Chesapeake 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 The Chesapeake will offset losses from the drop in The Chesapeake's long position.| Hotchkis Wiley vs. Hw Opportunities Mp | Hotchkis Wiley vs. Hotchkis Wiley Value | Hotchkis Wiley vs. Hotchkis Wiley Value | Hotchkis Wiley vs. Hotchkis Wiley Value |
| The Chesapeake vs. Emerald Growth Fund | The Chesapeake vs. Victory Rs Partners | The Chesapeake vs. Hotchkis Wiley Large | The Chesapeake vs. Chase Growth Fund |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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