Correlation Between Leuthold Core and Westwood Income
Can any of the company-specific risk be diversified away by investing in both Leuthold Core and Westwood Income 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 Leuthold Core and Westwood Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leuthold E Investment and Westwood Income Opportunity, you can compare the effects of market volatilities on Leuthold Core and Westwood Income 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 Leuthold Core with a short position of Westwood Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leuthold Core and Westwood Income.
Diversification Opportunities for Leuthold Core and Westwood Income
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leuthold and Westwood is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Leuthold E Investment and Westwood Income Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood Income Oppo and Leuthold Core 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 Leuthold E Investment are associated (or correlated) with Westwood Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood Income Oppo has no effect on the direction of Leuthold Core i.e., Leuthold Core and Westwood Income go up and down completely randomly.
Pair Corralation between Leuthold Core and Westwood Income
Assuming the 90 days horizon Leuthold E Investment is expected to under-perform the Westwood Income. In addition to that, Leuthold Core is 2.89 times more volatile than Westwood Income Opportunity. It trades about -0.04 of its total potential returns per unit of risk. Westwood Income Opportunity is currently generating about 0.17 per unit of volatility. If you would invest 1,227 in Westwood Income Opportunity on August 18, 2025 and sell it today you would earn a total of 48.00 from holding Westwood Income Opportunity or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leuthold E Investment vs. Westwood Income Opportunity
Performance |
| Timeline |
| Leuthold E Investment |
| Westwood Income Oppo |
Leuthold Core and Westwood Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leuthold Core and Westwood Income
The main advantage of trading using opposite Leuthold Core and Westwood Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leuthold Core position performs unexpectedly, Westwood Income 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 Westwood Income will offset losses from the drop in Westwood Income's long position.| Leuthold Core vs. Integrity Dividend Harvest | Leuthold Core vs. Allianzgi Nfj Mid Cap | Leuthold Core vs. Boston Trust Asset | Leuthold Core vs. Allianzgi Nfj Mid Cap |
| Westwood Income vs. Eagle Growth Income | Westwood Income vs. Eagle Growth Income | Westwood Income vs. Invesco Quality Municipal | Westwood Income vs. Invesco California Value |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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