Correlation Between Conestoga Small and Conestoga Micro
Can any of the company-specific risk be diversified away by investing in both Conestoga Small and Conestoga Micro 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 Micro 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 Micro Cap, you can compare the effects of market volatilities on Conestoga Small and Conestoga Micro 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 Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conestoga Small and Conestoga Micro.
Diversification Opportunities for Conestoga Small and Conestoga Micro
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CONESTOGA and Conestoga is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Conestoga Small Cap and Conestoga Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga Micro 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 Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Micro Cap has no effect on the direction of Conestoga Small i.e., Conestoga Small and Conestoga Micro go up and down completely randomly.
Pair Corralation between Conestoga Small and Conestoga Micro
Assuming the 90 days horizon Conestoga Small is expected to generate 1.08 times less return on investment than Conestoga Micro. But when comparing it to its historical volatility, Conestoga Small Cap is 1.27 times less risky than Conestoga Micro. It trades about 0.13 of its potential returns per unit of risk. Conestoga Micro Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 686.00 in Conestoga Micro Cap on September 5, 2024 and sell it today you would earn a total of 155.00 from holding Conestoga Micro Cap or generate 22.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Conestoga Small Cap vs. Conestoga Micro Cap
Performance |
| Timeline |
| Conestoga Small Cap |
| Conestoga Micro Cap |
Conestoga Small and Conestoga Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conestoga Small and Conestoga Micro
The main advantage of trading using opposite Conestoga Small and Conestoga Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conestoga Small position performs unexpectedly, Conestoga Micro 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 Micro will offset losses from the drop in Conestoga Micro's long position.| Conestoga Small vs. Franklin High Yield | Conestoga Small vs. Lind Capital Partners | Conestoga Small vs. Morningstar Municipal Bond | Conestoga Small vs. California High Yield Municipal |
| Conestoga Micro vs. Conestoga Small Cap | Conestoga Micro vs. Conestoga Smid Cap | Conestoga Micro vs. Amg Timessquare Mid | Conestoga Micro vs. T Rowe Price |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |