Correlation Between Federated Equity and Hotchkis Wiley
Can any of the company-specific risk be diversified away by investing in both Federated Equity 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 Federated Equity and Hotchkis Wiley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Equity Income and Hotchkis Wiley Value, you can compare the effects of market volatilities on Federated Equity 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 Federated Equity with a short position of Hotchkis Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Equity and Hotchkis Wiley.
Diversification Opportunities for Federated Equity and Hotchkis Wiley
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Hotchkis is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Federated Equity Income and Hotchkis Wiley Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotchkis Wiley Value and Federated Equity 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 Federated Equity Income 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 Value has no effect on the direction of Federated Equity i.e., Federated Equity and Hotchkis Wiley go up and down completely randomly.
Pair Corralation between Federated Equity and Hotchkis Wiley
Assuming the 90 days horizon Federated Equity Income is expected to generate 0.79 times more return on investment than Hotchkis Wiley. However, Federated Equity Income is 1.27 times less risky than Hotchkis Wiley. It trades about 0.27 of its potential returns per unit of risk. Hotchkis Wiley Value is currently generating about 0.16 per unit of risk. If you would invest 2,215 in Federated Equity Income on May 30, 2025 and sell it today you would earn a total of 223.00 from holding Federated Equity Income or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Equity Income vs. Hotchkis Wiley Value
Performance |
| Timeline |
| Federated Equity Income |
| Hotchkis Wiley Value |
Federated Equity and Hotchkis Wiley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Equity and Hotchkis Wiley
The main advantage of trading using opposite Federated Equity and Hotchkis Wiley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Equity 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.| Federated Equity vs. Short Term Government Fund | Federated Equity vs. Payden Government Fund | Federated Equity vs. Aig Government Money | Federated Equity vs. Wesmark Government Bond |
| Hotchkis Wiley vs. Hw Opportunities Mp | Hotchkis Wiley vs. Hotchkis Wiley Value | Hotchkis Wiley vs. Hotchkis Wiley Value | Hotchkis Wiley vs. Hotchkis Wiley 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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