Correlation Between Invesco Gold and Hotchkis Wiley

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

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

Diversification Opportunities for Invesco Gold and Hotchkis Wiley

-0.23

Correlation Coefficient

Invesco Gold  Hotchkis Wiley

Very good diversification

The 3 months correlation between Invesco and Hotchkis is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Gold Special and Hotchkis Wiley Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotchkis Wiley Diver and Invesco Gold 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 Invesco Gold Special 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 Diver has no effect on the direction of Invesco Gold i.e., Invesco Gold and Hotchkis Wiley go up and down completely randomly.

Pair Corralation between Invesco Gold and Hotchkis Wiley

Assuming the 90 days horizon Invesco Gold Special is expected to generate 1.3 times more return on investment than Hotchkis Wiley. However, Invesco Gold is 1.3 times more volatile than Hotchkis Wiley Diversified. It trades about 0.19 of its potential returns per unit of risk. Hotchkis Wiley Diversified is currently generating about -0.06 per unit of risk. If you would invest  2,703  in Invesco Gold Special on January 13, 2025 and sell it today you would earn a total of  788.00  from holding Invesco Gold Special or generate 29.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Invesco Gold Special  vs.  Hotchkis Wiley Diversified

Invesco Gold Special

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Gold Special are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Invesco Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Hotchkis Wiley Diver

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hotchkis Wiley Diversified has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Invesco Gold and Hotchkis Wiley

The main advantage of trading using opposite Invesco Gold and Hotchkis Wiley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Gold 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 Invesco Gold Special and Hotchkis Wiley Diversified 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.