Correlation Between Thompson Largecap and Hanlon Tactical
Can any of the company-specific risk be diversified away by investing in both Thompson Largecap and Hanlon Tactical 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 Thompson Largecap and Hanlon Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thompson Largecap Fund and Hanlon Tactical Dividend, you can compare the effects of market volatilities on Thompson Largecap and Hanlon Tactical 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 Thompson Largecap with a short position of Hanlon Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thompson Largecap and Hanlon Tactical.
Diversification Opportunities for Thompson Largecap and Hanlon Tactical
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thompson and Hanlon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Thompson Largecap Fund and Hanlon Tactical Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanlon Tactical Dividend and Thompson Largecap 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 Thompson Largecap Fund are associated (or correlated) with Hanlon Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanlon Tactical Dividend has no effect on the direction of Thompson Largecap i.e., Thompson Largecap and Hanlon Tactical go up and down completely randomly.
Pair Corralation between Thompson Largecap and Hanlon Tactical
Assuming the 90 days horizon Thompson Largecap Fund is expected to under-perform the Hanlon Tactical. In addition to that, Thompson Largecap is 1.06 times more volatile than Hanlon Tactical Dividend. It trades about -0.11 of its total potential returns per unit of risk. Hanlon Tactical Dividend is currently generating about -0.05 per unit of volatility. If you would invest 1,365 in Hanlon Tactical Dividend on November 28, 2024 and sell it today you would lose (10.00) from holding Hanlon Tactical Dividend or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thompson Largecap Fund vs. Hanlon Tactical Dividend
Performance |
| Timeline |
| Thompson Largecap |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Hanlon Tactical Dividend |
Thompson Largecap and Hanlon Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thompson Largecap and Hanlon Tactical
The main advantage of trading using opposite Thompson Largecap and Hanlon Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thompson Largecap position performs unexpectedly, Hanlon Tactical 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 Hanlon Tactical will offset losses from the drop in Hanlon Tactical's long position.| Thompson Largecap vs. Clipper Fund Inc | Thompson Largecap vs. Meridian Trarian Fund | Thompson Largecap vs. Meridian Growth Fund | Thompson Largecap vs. Muhlenkamp Fund Institutional |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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