Correlation Between Hanlon Tactical and Barrow Hanley

Can any of the company-specific risk be diversified away by investing in both Hanlon Tactical and Barrow Hanley 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 Hanlon Tactical and Barrow Hanley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hanlon Tactical Dividend and Barrow Hanley Concentrated, you can compare the effects of market volatilities on Hanlon Tactical and Barrow Hanley 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 Hanlon Tactical with a short position of Barrow Hanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanlon Tactical and Barrow Hanley.

Diversification Opportunities for Hanlon Tactical and Barrow Hanley

-0.59

Correlation Coefficient

Hanlon Tactical  Barrow Hanley

Excellent diversification

The 3 months correlation between Hanlon and Barrow is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hanlon Tactical Dividend and Barrow Hanley Concentrated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrow Hanley Concen and Hanlon Tactical 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 Hanlon Tactical Dividend are associated (or correlated) with Barrow Hanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrow Hanley Concen has no effect on the direction of Hanlon Tactical i.e., Hanlon Tactical and Barrow Hanley go up and down completely randomly.

Pair Corralation between Hanlon Tactical and Barrow Hanley

Assuming the 90 days horizon Hanlon Tactical Dividend is expected to generate 0.33 times more return on investment than Barrow Hanley. However, Hanlon Tactical Dividend is 3.02 times less risky than Barrow Hanley. It trades about -0.11 of its potential returns per unit of risk. Barrow Hanley Concentrated is currently generating about -0.21 per unit of risk. If you would invest  1,381  in Hanlon Tactical Dividend on September 30, 2024 and sell it today you would lose (29.00) from holding Hanlon Tactical Dividend or give up 2.1% of portfolio value over 90 days.

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

Hanlon Tactical Dividend  vs.  Barrow Hanley Concentrated

Hanlon Tactical Dividend

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hanlon Tactical Dividend are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hanlon Tactical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Barrow Hanley Concen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barrow Hanley Concentrated has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Hanlon Tactical and Barrow Hanley

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

The idea behind Hanlon Tactical Dividend and Barrow Hanley Concentrated 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.