Correlation Between Jacob Small and Hodges Small
Can any of the company-specific risk be diversified away by investing in both Jacob Small and Hodges Small 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 Small 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 Small Cap, you can compare the effects of market volatilities on Jacob Small and Hodges Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jacob Small and Hodges Small.
Diversification Opportunities for Jacob Small and Hodges Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Jacob and Hodges is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Jacob Small Cap and Hodges Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hodges Small Cap 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 Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hodges Small Cap has no effect on the direction of Jacob Small i.e., Jacob Small and Hodges Small go up and down completely randomly.
Pair Corralation between Jacob Small and Hodges Small
Assuming the 90 days horizon Jacob Small is expected to generate 1.2 times less return on investment than Hodges Small. In addition to that, Jacob Small is 1.45 times more volatile than Hodges Small Cap. It trades about 0.04 of its total potential returns per unit of risk. Hodges Small Cap is currently generating about 0.08 per unit of volatility. If you would invest 1,869 in Hodges Small Cap on August 31, 2024 and sell it today you would earn a total of 748.00 from holding Hodges Small Cap or generate 40.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jacob Small Cap vs. Hodges Small Cap
Performance |
| Timeline |
| Jacob Small Cap |
| Hodges Small Cap |
Jacob Small and Hodges Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jacob Small and Hodges Small
The main advantage of trading using opposite Jacob Small and Hodges Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacob Small position performs unexpectedly, Hodges Small 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 Small will offset losses from the drop in Hodges Small's long position.| Jacob Small vs. Jacob Micro Cap | Jacob Small vs. Jacob Internet Fund | Jacob Small vs. Jacob Forward ETF | Jacob Small vs. Oberweis Small Cap Opportunities |
| Hodges Small vs. Hodges Fund Retail | Hodges Small vs. Amg Southernsun Small | Hodges Small vs. Brown Advisory Growth | Hodges Small vs. Eventide Gilead 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |