Correlation Between Jacob Small and Hodges Blue
Can any of the company-specific risk be diversified away by investing in both Jacob Small and Hodges Blue 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 Jacob Small and Hodges Blue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jacob Small Cap and Hodges Blue Chip, you can compare the effects of market volatilities on Jacob Small and Hodges Blue 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 Jacob Small with a short position of Hodges Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacob Small and Hodges Blue.
Diversification Opportunities for Jacob Small and Hodges Blue
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jacob and Hodges is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Jacob Small Cap and Hodges Blue Chip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hodges Blue Chip and Jacob 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 Jacob Small Cap are associated (or correlated) with Hodges Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hodges Blue Chip has no effect on the direction of Jacob Small i.e., Jacob Small and Hodges Blue go up and down completely randomly.
Pair Corralation between Jacob Small and Hodges Blue
Assuming the 90 days horizon Jacob Small Cap is expected to generate 2.17 times more return on investment than Hodges Blue. However, Jacob Small is 2.17 times more volatile than Hodges Blue Chip. It trades about 0.26 of its potential returns per unit of risk. Hodges Blue Chip is currently generating about 0.22 per unit of risk. If you would invest 1,865 in Jacob Small Cap on August 28, 2024 and sell it today you would earn a total of 238.00 from holding Jacob Small Cap or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacob Small Cap vs. Hodges Blue Chip
Performance |
| Timeline |
| Jacob Small Cap |
| Hodges Blue Chip |
Jacob Small and Hodges Blue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacob Small and Hodges Blue
The main advantage of trading using opposite Jacob Small and Hodges Blue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacob Small position performs unexpectedly, Hodges Blue 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 Hodges Blue will offset losses from the drop in Hodges Blue's long position.| Jacob Small vs. Small Pany Growth | Jacob Small vs. Jacob Internet Fund | Jacob Small vs. Amer Beacon Ark | Jacob Small vs. Needham Small Cap |
| Hodges Blue vs. Hodges Small Cap | Hodges Blue vs. Hodges Fund Retail | Hodges Blue vs. Hodges Small Intrinsic | Hodges Blue vs. Brown Advisory Flexible |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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