Correlation Between Nationwide Highmark and Hotchkis Wiley
Can any of the company-specific risk be diversified away by investing in both Nationwide Highmark and Hotchkis Wiley 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 Nationwide Highmark and Hotchkis Wiley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Highmark Small and Hotchkis Wiley Small, you can compare the effects of market volatilities on Nationwide Highmark and Hotchkis Wiley 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 Nationwide Highmark with a short position of Hotchkis Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Highmark and Hotchkis Wiley.
Diversification Opportunities for Nationwide Highmark and Hotchkis Wiley
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nationwide and Hotchkis is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Highmark Small and Hotchkis Wiley Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotchkis Wiley Small and Nationwide Highmark 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 Nationwide Highmark Small are associated (or correlated) with Hotchkis Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotchkis Wiley Small has no effect on the direction of Nationwide Highmark i.e., Nationwide Highmark and Hotchkis Wiley go up and down completely randomly.
Pair Corralation between Nationwide Highmark and Hotchkis Wiley
Assuming the 90 days horizon Nationwide Highmark is expected to generate 1.55 times less return on investment than Hotchkis Wiley. But when comparing it to its historical volatility, Nationwide Highmark Small is 1.12 times less risky than Hotchkis Wiley. It trades about 0.15 of its potential returns per unit of risk. Hotchkis Wiley Small is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 6,045 in Hotchkis Wiley Small on August 30, 2024 and sell it today you would earn a total of 388.00 from holding Hotchkis Wiley Small or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Highmark Small vs. Hotchkis Wiley Small
Performance |
| Timeline |
| Nationwide Highmark Small |
| Hotchkis Wiley Small |
Nationwide Highmark and Hotchkis Wiley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Highmark and Hotchkis Wiley
The main advantage of trading using opposite Nationwide Highmark and Hotchkis Wiley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Highmark position performs unexpectedly, Hotchkis Wiley 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 Hotchkis Wiley will offset losses from the drop in Hotchkis Wiley's long position.| Nationwide Highmark vs. Nationwide Highmark Small | Nationwide Highmark vs. Nationwide Highmark Small | Nationwide Highmark vs. Janus Venture Fund | Nationwide Highmark vs. Hotchkis Wiley Small |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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