Correlation Between Perella Weinberg and Houlihan Lokey
Can any of the company-specific risk be diversified away by investing in both Perella Weinberg 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 Perella Weinberg and Houlihan Lokey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perella Weinberg Partners and Houlihan Lokey, you can compare the effects of market volatilities on Perella Weinberg 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 Perella Weinberg with a short position of Houlihan Lokey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perella Weinberg and Houlihan Lokey.
Diversification Opportunities for Perella Weinberg and Houlihan Lokey
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Perella and Houlihan is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Perella Weinberg Partners and Houlihan Lokey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Houlihan Lokey and Perella Weinberg 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 Perella Weinberg Partners 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 Perella Weinberg i.e., Perella Weinberg and Houlihan Lokey go up and down completely randomly.
Pair Corralation between Perella Weinberg and Houlihan Lokey
Considering the 90-day investment horizon Perella Weinberg Partners is expected to generate 1.71 times more return on investment than Houlihan Lokey. However, Perella Weinberg is 1.71 times more volatile than Houlihan Lokey. It trades about 0.25 of its potential returns per unit of risk. Houlihan Lokey is currently generating about 0.24 per unit of risk. If you would invest 2,076 in Perella Weinberg Partners on August 28, 2024 and sell it today you would earn a total of 508.00 from holding Perella Weinberg Partners or generate 24.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perella Weinberg Partners vs. Houlihan Lokey
Performance |
| Timeline |
| Perella Weinberg Partners |
| Houlihan Lokey |
Perella Weinberg and Houlihan Lokey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perella Weinberg and Houlihan Lokey
The main advantage of trading using opposite Perella Weinberg and Houlihan Lokey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perella Weinberg 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.| Perella Weinberg vs. Evercore Partners | Perella Weinberg vs. Lazard | Perella Weinberg vs. Piper Sandler Companies | Perella Weinberg vs. Moelis Co |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stocks Directory Find actively traded stocks across global markets |