Correlation Between Westwood Largecap and Jackson Square
Can any of the company-specific risk be diversified away by investing in both Westwood Largecap and Jackson Square 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 Jackson Square 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 Jackson Square Smid Cap, you can compare the effects of market volatilities on Westwood Largecap and Jackson Square 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 Jackson Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Largecap and Jackson Square.
Diversification Opportunities for Westwood Largecap and Jackson Square
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Westwood and JACKSON is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Largecap Value and Jackson Square Smid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Square Smid 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 Jackson Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackson Square Smid has no effect on the direction of Westwood Largecap i.e., Westwood Largecap and Jackson Square go up and down completely randomly.
Pair Corralation between Westwood Largecap and Jackson Square
Assuming the 90 days horizon Westwood Largecap Value is expected to generate 0.58 times more return on investment than Jackson Square. However, Westwood Largecap Value is 1.72 times less risky than Jackson Square. It trades about 0.09 of its potential returns per unit of risk. Jackson Square Smid Cap is currently generating about 0.04 per unit of risk. If you would invest 1,243 in Westwood Largecap Value on September 4, 2024 and sell it today you would earn a total of 300.00 from holding Westwood Largecap Value or generate 24.14% 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. Jackson Square Smid Cap
Performance |
| Timeline |
| Westwood Largecap Value |
| Jackson Square Smid |
Westwood Largecap and Jackson Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Largecap and Jackson Square
The main advantage of trading using opposite Westwood Largecap and Jackson Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Largecap position performs unexpectedly, Jackson Square 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 Jackson Square will offset losses from the drop in Jackson Square's long position.| Westwood Largecap vs. Ab Small Cap | Westwood Largecap vs. Oklahoma College Savings | Westwood Largecap vs. Fisher Small Cap | Westwood Largecap vs. Us Small Cap |
| Jackson Square vs. Franklin Growth Fund | Jackson Square vs. Janus Venture Fund | Jackson Square vs. Jackson Square Smid Cap | Jackson Square vs. Pimco Small Cap |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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