Correlation Between Longleaf Partners and Tweedy Browne
Can any of the company-specific risk be diversified away by investing in both Longleaf Partners and Tweedy Browne 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 Longleaf Partners and Tweedy Browne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Longleaf Partners International and Tweedy Browne Global, you can compare the effects of market volatilities on Longleaf Partners and Tweedy Browne 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 Longleaf Partners with a short position of Tweedy Browne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longleaf Partners and Tweedy Browne.
Diversification Opportunities for Longleaf Partners and Tweedy Browne
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Longleaf and Tweedy is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Longleaf Partners Internationa and Tweedy Browne Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tweedy Browne Global and Longleaf Partners 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 Longleaf Partners International are associated (or correlated) with Tweedy Browne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tweedy Browne Global has no effect on the direction of Longleaf Partners i.e., Longleaf Partners and Tweedy Browne go up and down completely randomly.
Pair Corralation between Longleaf Partners and Tweedy Browne
Assuming the 90 days horizon Longleaf Partners International is expected to generate 1.39 times more return on investment than Tweedy Browne. However, Longleaf Partners is 1.39 times more volatile than Tweedy Browne Global. It trades about 0.28 of its potential returns per unit of risk. Tweedy Browne Global is currently generating about 0.3 per unit of risk. If you would invest 1,568 in Longleaf Partners International on April 23, 2025 and sell it today you would earn a total of 209.00 from holding Longleaf Partners International or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Longleaf Partners Internationa vs. Tweedy Browne Global
Performance |
| Timeline |
| Longleaf Partners |
| Tweedy Browne Global |
Longleaf Partners and Tweedy Browne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longleaf Partners and Tweedy Browne
The main advantage of trading using opposite Longleaf Partners and Tweedy Browne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longleaf Partners position performs unexpectedly, Tweedy Browne 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 Tweedy Browne will offset losses from the drop in Tweedy Browne's long position.| Longleaf Partners vs. Qs Large Cap | Longleaf Partners vs. Qs Large Cap | Longleaf Partners vs. Vest Large Cap | Longleaf Partners vs. M Large Cap |
| Tweedy Browne vs. Tweedy Browne Worldwide | Tweedy Browne vs. Tweedy Browne Value | Tweedy Browne vs. Tweedy Browne Global | Tweedy Browne vs. Longleaf Partners International |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |