Correlation Between NYSE Composite and Hotchkis Wiley
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Hotchkis Wiley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Hotchkis Wiley Small, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Hotchkis Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Hotchkis Wiley.
Diversification Opportunities for NYSE Composite and Hotchkis Wiley
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Hotchkis is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Hotchkis Wiley go up and down completely randomly.
Pair Corralation between NYSE Composite and Hotchkis Wiley
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.04 times less return on investment than Hotchkis Wiley. But when comparing it to its historical volatility, NYSE Composite is 1.64 times less risky than Hotchkis Wiley. It trades about 0.08 of its potential returns per unit of risk. Hotchkis Wiley Small is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,638 in Hotchkis Wiley Small on August 31, 2024 and sell it today you would earn a total of 1,960 from holding Hotchkis Wiley Small or generate 29.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
NYSE Composite vs. Hotchkis Wiley Small
Performance |
| Timeline |
NYSE Composite and Hotchkis Wiley Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Hotchkis Wiley Small
Pair trading matchups for Hotchkis Wiley
Pair Trading with NYSE Composite and Hotchkis Wiley
The main advantage of trading using opposite NYSE Composite and Hotchkis Wiley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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