Correlation Between Cambiar Smid and Walden Midcap
Can any of the company-specific risk be diversified away by investing in both Cambiar Smid and Walden Midcap 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 Walden Midcap 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 Walden Midcap Fund, you can compare the effects of market volatilities on Cambiar Smid and Walden Midcap 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 Walden Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambiar Smid and Walden Midcap.
Diversification Opportunities for Cambiar Smid and Walden Midcap
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambiar and Walden is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cambiar Smid Fund and Walden Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walden Midcap 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 Walden Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walden Midcap has no effect on the direction of Cambiar Smid i.e., Cambiar Smid and Walden Midcap go up and down completely randomly.
Pair Corralation between Cambiar Smid and Walden Midcap
Assuming the 90 days horizon Cambiar Smid is expected to generate 5.04 times less return on investment than Walden Midcap. In addition to that, Cambiar Smid is 1.04 times more volatile than Walden Midcap Fund. It trades about 0.01 of its total potential returns per unit of risk. Walden Midcap Fund is currently generating about 0.03 per unit of volatility. If you would invest 2,109 in Walden Midcap Fund on October 25, 2024 and sell it today you would earn a total of 244.00 from holding Walden Midcap Fund or generate 11.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambiar Smid Fund vs. Walden Midcap Fund
Performance |
| Timeline |
| Cambiar Smid |
| Walden Midcap |
Cambiar Smid and Walden Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambiar Smid and Walden Midcap
The main advantage of trading using opposite Cambiar Smid and Walden Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambiar Smid position performs unexpectedly, Walden Midcap 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 Walden Midcap will offset losses from the drop in Walden Midcap's long position.| Cambiar Smid vs. Jpmorgan Value Advantage | Cambiar Smid vs. Jpmorgan Growth Advantage | Cambiar Smid vs. Jpmorgan Equity Income | Cambiar Smid vs. Barloworld Ltd ADR |
| Walden Midcap vs. Jpmorgan Value Advantage | Walden Midcap vs. Jpmorgan Growth Advantage | Walden Midcap vs. Jpmorgan Equity Income | Walden Midcap vs. Barloworld Ltd ADR |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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