Correlation Between Conestoga Small and Conestoga Smid
Can any of the company-specific risk be diversified away by investing in both Conestoga Small and Conestoga Smid 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 Smid 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 Smid Cap, you can compare the effects of market volatilities on Conestoga Small and Conestoga Smid 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 Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conestoga Small and Conestoga Smid.
Diversification Opportunities for Conestoga Small and Conestoga Smid
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Conestoga and Conestoga is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Conestoga Small Cap and Conestoga Smid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga Smid 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 Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Smid Cap has no effect on the direction of Conestoga Small i.e., Conestoga Small and Conestoga Smid go up and down completely randomly.
Pair Corralation between Conestoga Small and Conestoga Smid
Assuming the 90 days horizon Conestoga Small Cap is expected to generate 1.14 times more return on investment than Conestoga Smid. However, Conestoga Small is 1.14 times more volatile than Conestoga Smid Cap. It trades about -0.01 of its potential returns per unit of risk. Conestoga Smid Cap is currently generating about -0.02 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 | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Conestoga Small Cap vs. Conestoga Smid Cap
Performance |
| Timeline |
| Conestoga Small Cap |
| Conestoga Smid Cap |
Conestoga Small and Conestoga Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conestoga Small and Conestoga Smid
The main advantage of trading using opposite Conestoga Small and Conestoga Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conestoga Small position performs unexpectedly, Conestoga Smid 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 Smid will offset losses from the drop in Conestoga Smid'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 Smid vs. Lsv Small Cap | Conestoga Smid vs. Ab Small Cap | Conestoga Smid vs. Pace Smallmedium Value | Conestoga Smid vs. Mutual Of America |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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