Correlation Between MarketAxess Holdings and Houlihan Lokey
Can any of the company-specific risk be diversified away by investing in both MarketAxess Holdings and Houlihan Lokey 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 MarketAxess Holdings and Houlihan Lokey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MarketAxess Holdings and Houlihan Lokey, you can compare the effects of market volatilities on MarketAxess Holdings and Houlihan Lokey 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 MarketAxess Holdings with a short position of Houlihan Lokey. Check out your portfolio center. Please also check ongoing floating volatility patterns of MarketAxess Holdings and Houlihan Lokey.
Diversification Opportunities for MarketAxess Holdings and Houlihan Lokey
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MarketAxess and Houlihan is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding MarketAxess Holdings and Houlihan Lokey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Houlihan Lokey and MarketAxess Holdings 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 MarketAxess Holdings are associated (or correlated) with Houlihan Lokey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Houlihan Lokey has no effect on the direction of MarketAxess Holdings i.e., MarketAxess Holdings and Houlihan Lokey go up and down completely randomly.
Pair Corralation between MarketAxess Holdings and Houlihan Lokey
Given the investment horizon of 90 days MarketAxess Holdings is expected to under-perform the Houlihan Lokey. But the stock apears to be less risky and, when comparing its historical volatility, MarketAxess Holdings is 2.21 times less risky than Houlihan Lokey. The stock trades about -0.35 of its potential returns per unit of risk. The Houlihan Lokey is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 16,811 in Houlihan Lokey on August 28, 2024 and sell it today you would earn a total of 2,238 from holding Houlihan Lokey or generate 13.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MarketAxess Holdings vs. Houlihan Lokey
Performance |
| Timeline |
| MarketAxess Holdings |
| Houlihan Lokey |
MarketAxess Holdings and Houlihan Lokey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MarketAxess Holdings and Houlihan Lokey
The main advantage of trading using opposite MarketAxess Holdings and Houlihan Lokey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MarketAxess Holdings position performs unexpectedly, Houlihan Lokey 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 Houlihan Lokey will offset losses from the drop in Houlihan Lokey's long position.| MarketAxess Holdings vs. Interactive Brokers Group | MarketAxess Holdings vs. Evercore Partners | MarketAxess Holdings vs. PJT Partners | MarketAxess Holdings vs. LPL Financial Holdings |
| Houlihan Lokey vs. Lazard | Houlihan Lokey vs. PJT Partners | Houlihan Lokey vs. Moelis Co | Houlihan Lokey vs. Piper Sandler Companies |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |