Correlation Between Westwood High and Westwood Quality
Can any of the company-specific risk be diversified away by investing in both Westwood High and Westwood Quality 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 Westwood High and Westwood Quality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood High Income and Westwood Quality Smidcap, you can compare the effects of market volatilities on Westwood High and Westwood Quality 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 Westwood High with a short position of Westwood Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood High and Westwood Quality.
Diversification Opportunities for Westwood High and Westwood Quality
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westwood and Westwood is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westwood High Income and Westwood Quality Smidcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood Quality Smidcap and Westwood High 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 Westwood High Income are associated (or correlated) with Westwood Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood Quality Smidcap has no effect on the direction of Westwood High i.e., Westwood High and Westwood Quality go up and down completely randomly.
Pair Corralation between Westwood High and Westwood Quality
If you would invest 1,013 in Westwood High Income on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Westwood High Income or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Westwood High Income vs. Westwood Quality Smidcap
Performance |
| Timeline |
| Westwood High Income |
| Westwood Quality Smidcap |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Westwood High and Westwood Quality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood High and Westwood Quality
The main advantage of trading using opposite Westwood High and Westwood Quality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood High position performs unexpectedly, Westwood Quality 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 Westwood Quality will offset losses from the drop in Westwood Quality's long position.| Westwood High vs. T Rowe Price | Westwood High vs. Tfa Alphagen Growth | Westwood High vs. Vy Baron Growth | Westwood High vs. Artisan Small Cap |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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