Correlation Between Cambiar Smid and Small-cap Growth
Can any of the company-specific risk be diversified away by investing in both Cambiar Smid and Small-cap Growth 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 Cambiar Smid and Small-cap Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambiar Smid Fund and Small Cap Growth Profund, you can compare the effects of market volatilities on Cambiar Smid and Small-cap Growth 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 Cambiar Smid with a short position of Small-cap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambiar Smid and Small-cap Growth.
Diversification Opportunities for Cambiar Smid and Small-cap Growth
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cambiar and Small-cap is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cambiar Smid Fund and Small Cap Growth Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Growth and Cambiar Smid 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 Cambiar Smid Fund are associated (or correlated) with Small-cap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Growth has no effect on the direction of Cambiar Smid i.e., Cambiar Smid and Small-cap Growth go up and down completely randomly.
Pair Corralation between Cambiar Smid and Small-cap Growth
Assuming the 90 days horizon Cambiar Smid Fund is expected to under-perform the Small-cap Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Cambiar Smid Fund is 1.12 times less risky than Small-cap Growth. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Small Cap Growth Profund is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 11,298 in Small Cap Growth Profund on October 22, 2024 and sell it today you would earn a total of 14.00 from holding Small Cap Growth Profund or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambiar Smid Fund vs. Small Cap Growth Profund
Performance |
| Timeline |
| Cambiar Smid |
| Small Cap Growth |
Cambiar Smid and Small-cap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambiar Smid and Small-cap Growth
The main advantage of trading using opposite Cambiar Smid and Small-cap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambiar Smid position performs unexpectedly, Small-cap Growth 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 Small-cap Growth will offset losses from the drop in Small-cap Growth's long position.| Cambiar Smid vs. Small Cap Growth Profund | Cambiar Smid vs. Applied Finance Explorer | Cambiar Smid vs. Mutual Of America | Cambiar Smid vs. Lsv Small Cap |
| Small-cap Growth vs. Small Cap Value Profund | Small-cap Growth vs. Mid Cap Growth Profund | Small-cap Growth vs. Mid Cap Value Profund | Small-cap Growth vs. Small Cap Profund Small Cap |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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