Correlation Between Us Small and Hotchkis Wiley

Can any of the company-specific risk be diversified away by investing in both Us Small and Hotchkis Wiley 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 Us Small and Hotchkis Wiley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Us Small Cap and Hotchkis Wiley Small, you can compare the effects of market volatilities on Us Small and Hotchkis Wiley 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 Us Small with a short position of Hotchkis Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Small and Hotchkis Wiley.

Diversification Opportunities for Us Small and Hotchkis Wiley

0.99

Correlation Coefficient

Us Small  Hotchkis Wiley

No risk reduction

The 3 months correlation between DFSVX and Hotchkis is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Us Small Cap and Hotchkis Wiley Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotchkis Wiley Small and Us Small 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 Us Small Cap are associated (or correlated) with Hotchkis Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotchkis Wiley Small has no effect on the direction of Us Small i.e., Us Small and Hotchkis Wiley go up and down completely randomly.

Pair Corralation between Us Small and Hotchkis Wiley

Assuming the 90 days horizon Us Small is expected to generate 1.05 times less return on investment than Hotchkis Wiley. In addition to that, Us Small is 1.0 times more volatile than Hotchkis Wiley Small. It trades about 0.06 of its total potential returns per unit of risk. Hotchkis Wiley Small is currently generating about 0.06 per unit of volatility. If you would invest  5,118  in Hotchkis Wiley Small on May 12, 2025 and sell it today you would earn a total of  210.00  from holding Hotchkis Wiley Small or generate 4.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Us Small Cap  vs.  Hotchkis Wiley Small

Us Small Cap

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Us Small Cap are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Us Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hotchkis Wiley Small

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Hotchkis Wiley Small are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Hotchkis Wiley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Us Small and Hotchkis Wiley

The main advantage of trading using opposite Us Small and Hotchkis Wiley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Small position performs unexpectedly, Hotchkis Wiley 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 Hotchkis Wiley will offset losses from the drop in Hotchkis Wiley's long position.

The idea behind Us Small Cap and Hotchkis Wiley Small pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.