Correlation Between William Blair and Selected American
Can any of the company-specific risk be diversified away by investing in both William Blair and Selected American 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 William Blair and Selected American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between William Blair International and Selected American Shares, you can compare the effects of market volatilities on William Blair and Selected American 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 William Blair with a short position of Selected American. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Blair and Selected American.
Diversification Opportunities for William Blair and Selected American
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between William and Selected is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding William Blair International and Selected American Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selected American Shares and William Blair 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 William Blair International are associated (or correlated) with Selected American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selected American Shares has no effect on the direction of William Blair i.e., William Blair and Selected American go up and down completely randomly.
Pair Corralation between William Blair and Selected American
Assuming the 90 days horizon William Blair International is expected to generate 1.05 times more return on investment than Selected American. However, William Blair is 1.05 times more volatile than Selected American Shares. It trades about -0.06 of its potential returns per unit of risk. Selected American Shares is currently generating about -0.09 per unit of risk. If you would invest 2,764 in William Blair International on December 25, 2024 and sell it today you would lose (49.00) from holding William Blair International or give up 1.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
William Blair International vs. Selected American Shares
Performance |
| Timeline |
| William Blair Intern |
| Selected American Shares |
William Blair and Selected American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with William Blair and Selected American
The main advantage of trading using opposite William Blair and Selected American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Blair position performs unexpectedly, Selected American 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 Selected American will offset losses from the drop in Selected American's long position.| William Blair vs. William Blair China | William Blair vs. William Blair China | William Blair vs. William Blair Emerging | William Blair vs. William Blair International |
| Selected American vs. Marsico Focus Fund | Selected American vs. Artisan International Fund | Selected American vs. Third Avenue Value | Selected American vs. Oakmark Select Fund |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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