Correlation Between Westwood Largecap and Knights Of
Can any of the company-specific risk be diversified away by investing in both Westwood Largecap and Knights Of 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 Knights Of 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 Knights Of Columbus, you can compare the effects of market volatilities on Westwood Largecap and Knights Of 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 Knights Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Largecap and Knights Of.
Diversification Opportunities for Westwood Largecap and Knights Of
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westwood and Knights is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Largecap Value and Knights Of Columbus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knights Of Columbus 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 Knights Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knights Of Columbus has no effect on the direction of Westwood Largecap i.e., Westwood Largecap and Knights Of go up and down completely randomly.
Pair Corralation between Westwood Largecap and Knights Of
Assuming the 90 days horizon Westwood Largecap Value is expected to generate 2.52 times more return on investment than Knights Of. However, Westwood Largecap is 2.52 times more volatile than Knights Of Columbus. It trades about 0.29 of its potential returns per unit of risk. Knights Of Columbus is currently generating about 0.21 per unit of risk. If you would invest 1,470 in Westwood Largecap Value on September 2, 2024 and sell it today you would earn a total of 80.00 from holding Westwood Largecap Value or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westwood Largecap Value vs. Knights Of Columbus
Performance |
| Timeline |
| Westwood Largecap Value |
| Knights Of Columbus |
Westwood Largecap and Knights Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Largecap and Knights Of
The main advantage of trading using opposite Westwood Largecap and Knights Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Largecap position performs unexpectedly, Knights Of 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 Knights Of will offset losses from the drop in Knights Of's long position.| Westwood Largecap vs. Ultra Short Fixed Income | Westwood Largecap vs. Ms Global Fixed | Westwood Largecap vs. Multimedia Portfolio Multimedia | Westwood Largecap vs. Huber Capital Equity |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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