Correlation Between Westwood Largecap and Equity Growth
Can any of the company-specific risk be diversified away by investing in both Westwood Largecap and Equity Growth 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 Largecap and Equity Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Largecap Value and Equity Growth Fund, you can compare the effects of market volatilities on Westwood Largecap and Equity Growth 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 Largecap with a short position of Equity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Largecap and Equity Growth.
Diversification Opportunities for Westwood Largecap and Equity Growth
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Westwood and Equity is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Largecap Value and Equity Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth and Westwood 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 Westwood Largecap Value are associated (or correlated) with Equity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth has no effect on the direction of Westwood Largecap i.e., Westwood Largecap and Equity Growth go up and down completely randomly.
Pair Corralation between Westwood Largecap and Equity Growth
Assuming the 90 days horizon Westwood Largecap is expected to generate 1.3 times less return on investment than Equity Growth. But when comparing it to its historical volatility, Westwood Largecap Value is 1.33 times less risky than Equity Growth. It trades about 0.13 of its potential returns per unit of risk. Equity Growth Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,045 in Equity Growth Fund on September 3, 2024 and sell it today you would earn a total of 426.00 from holding Equity Growth Fund or generate 13.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westwood Largecap Value vs. Equity Growth Fund
Performance |
| Timeline |
| Westwood Largecap Value |
| Equity Growth |
Westwood Largecap and Equity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Largecap and Equity Growth
The main advantage of trading using opposite Westwood Largecap and Equity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Largecap position performs unexpectedly, Equity Growth 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 Equity Growth will offset losses from the drop in Equity Growth's long position.| Westwood Largecap vs. Ab Bond Inflation | Westwood Largecap vs. Arrow Managed Futures | Westwood Largecap vs. Lord Abbett Inflation | Westwood Largecap vs. Guidepath Managed Futures |
| Equity Growth vs. Blrc Sgy Mnp | Equity Growth vs. Maryland Tax Free Bond | Equity Growth vs. Ambrus Core Bond | Equity Growth vs. Ab Bond Inflation |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |