Correlation Between Quantitative Longshort and Hussman Strategic

Can any of the company-specific risk be diversified away by investing in both Quantitative Longshort and Hussman Strategic 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 Quantitative Longshort and Hussman Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Quantitative Longshort Equity and Hussman Strategic Dividend, you can compare the effects of market volatilities on Quantitative Longshort and Hussman Strategic 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 Quantitative Longshort with a short position of Hussman Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative Longshort and Hussman Strategic.

Diversification Opportunities for Quantitative Longshort and Hussman Strategic

0.48

Correlation Coefficient

Quantitative Longshort  Hussman Strategic

Very weak diversification

The 3 months correlation between Quantitative and Hussman is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity and Hussman Strategic Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hussman Strategic and Quantitative Longshort 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 Quantitative Longshort Equity are associated (or correlated) with Hussman Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hussman Strategic has no effect on the direction of Quantitative Longshort i.e., Quantitative Longshort and Hussman Strategic go up and down completely randomly.

Pair Corralation between Quantitative Longshort and Hussman Strategic

Assuming the 90 days horizon Quantitative Longshort Equity is expected to generate 3.94 times more return on investment than Hussman Strategic. However, Quantitative Longshort is 3.94 times more volatile than Hussman Strategic Dividend. It trades about 0.19 of its potential returns per unit of risk. Hussman Strategic Dividend is currently generating about 0.02 per unit of risk. If you would invest  1,409  in Quantitative Longshort Equity on September 16, 2024 and sell it today you would earn a total of  75.00  from holding Quantitative Longshort Equity or generate 5.32% return on investment over 90 days.

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

Quantitative Longshort Equity  vs.  Hussman Strategic Dividend

Quantitative Longshort

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quantitative Longshort Equity are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Quantitative Longshort is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hussman Strategic

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hussman Strategic Dividend are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hussman Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Quantitative Longshort and Hussman Strategic

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

The idea behind Quantitative Longshort Equity and Hussman Strategic Dividend 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.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.