Correlation Between Conestoga Small and Conestoga Mid
Can any of the company-specific risk be diversified away by investing in both Conestoga Small and Conestoga Mid 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 Conestoga Small and Conestoga Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conestoga Small Cap and Conestoga Mid Cap, you can compare the effects of market volatilities on Conestoga Small and Conestoga Mid 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 Conestoga Small with a short position of Conestoga Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conestoga Small and Conestoga Mid.
Diversification Opportunities for Conestoga Small and Conestoga Mid
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Conestoga and Conestoga is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Conestoga Small Cap and Conestoga Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga Mid Cap and Conestoga Small 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 Conestoga Small Cap are associated (or correlated) with Conestoga Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Mid Cap has no effect on the direction of Conestoga Small i.e., Conestoga Small and Conestoga Mid go up and down completely randomly.
Pair Corralation between Conestoga Small and Conestoga Mid
Assuming the 90 days horizon Conestoga Small Cap is expected to generate 1.22 times more return on investment than Conestoga Mid. However, Conestoga Small is 1.22 times more volatile than Conestoga Mid Cap. It trades about -0.01 of its potential returns per unit of risk. Conestoga Mid Cap is currently generating about -0.04 per unit of risk. If you would invest 8,291 in Conestoga Small Cap on September 12, 2024 and sell it today you would lose (32.00) from holding Conestoga Small Cap or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Conestoga Small Cap vs. Conestoga Mid Cap
Performance |
| Timeline |
| Conestoga Small Cap |
| Conestoga Mid Cap |
Conestoga Small and Conestoga Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conestoga Small and Conestoga Mid
The main advantage of trading using opposite Conestoga Small and Conestoga Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conestoga Small position performs unexpectedly, Conestoga Mid 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 Conestoga Mid will offset losses from the drop in Conestoga Mid's long position.| Conestoga Small vs. Ab Small Cap | Conestoga Small vs. Vy Columbia Small | Conestoga Small vs. Ab Small Cap | Conestoga Small vs. Lebenthal Lisanti Small |
| Conestoga Mid vs. Ab Global Risk | Conestoga Mid vs. Us High Relative | Conestoga Mid vs. Needham Aggressive Growth | Conestoga Mid vs. Artisan High Income |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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