Correlation Between Westwood Income and Chartwell Small
Can any of the company-specific risk be diversified away by investing in both Westwood Income and Chartwell Small 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 Income and Chartwell Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Income Opportunity and Chartwell Small Cap, you can compare the effects of market volatilities on Westwood Income and Chartwell Small 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 Income with a short position of Chartwell Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Income and Chartwell Small.
Diversification Opportunities for Westwood Income and Chartwell Small
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Westwood and Chartwell is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Income Opportunity and Chartwell Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chartwell Small Cap and Westwood Income 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 Income Opportunity are associated (or correlated) with Chartwell Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chartwell Small Cap has no effect on the direction of Westwood Income i.e., Westwood Income and Chartwell Small go up and down completely randomly.
Pair Corralation between Westwood Income and Chartwell Small
Assuming the 90 days horizon Westwood Income is expected to generate 1.38 times less return on investment than Chartwell Small. But when comparing it to its historical volatility, Westwood Income Opportunity is 2.74 times less risky than Chartwell Small. It trades about 0.1 of its potential returns per unit of risk. Chartwell Small Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,879 in Chartwell Small Cap on September 12, 2024 and sell it today you would earn a total of 378.00 from holding Chartwell Small Cap or generate 20.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Westwood Income Opportunity vs. Chartwell Small Cap
Performance |
| Timeline |
| Westwood Income Oppo |
| Chartwell Small Cap |
Westwood Income and Chartwell Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Income and Chartwell Small
The main advantage of trading using opposite Westwood Income and Chartwell Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Income position performs unexpectedly, Chartwell Small 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 Chartwell Small will offset losses from the drop in Chartwell Small's long position.| Westwood Income vs. Prudential Government Money | Westwood Income vs. Cref Money Market | Westwood Income vs. Hewitt Money Market | Westwood Income vs. Money Market Obligations |
| Chartwell Small vs. Icon Financial Fund | Chartwell Small vs. Prudential Jennison Financial | Chartwell Small vs. Goldman Sachs Financial | Chartwell Small vs. John Hancock Financial |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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