Correlation Between Conestoga Smid and Fam Equity-income
Can any of the company-specific risk be diversified away by investing in both Conestoga Smid and Fam Equity-income 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 Smid and Fam Equity-income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conestoga Smid Cap and Fam Equity Income Fund, you can compare the effects of market volatilities on Conestoga Smid and Fam Equity-income 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 Smid with a short position of Fam Equity-income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conestoga Smid and Fam Equity-income.
Diversification Opportunities for Conestoga Smid and Fam Equity-income
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Conestoga and Fam is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Conestoga Smid Cap and Fam Equity Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fam Equity Income and Conestoga 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 Conestoga Smid Cap are associated (or correlated) with Fam Equity-income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fam Equity Income has no effect on the direction of Conestoga Smid i.e., Conestoga Smid and Fam Equity-income go up and down completely randomly.
Pair Corralation between Conestoga Smid and Fam Equity-income
Assuming the 90 days horizon Conestoga Smid is expected to generate 1.03 times less return on investment than Fam Equity-income. In addition to that, Conestoga Smid is 1.36 times more volatile than Fam Equity Income Fund. It trades about 0.07 of its total potential returns per unit of risk. Fam Equity Income Fund is currently generating about 0.1 per unit of volatility. If you would invest 4,693 in Fam Equity Income Fund on September 2, 2024 and sell it today you would earn a total of 1,548 from holding Fam Equity Income Fund or generate 32.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Conestoga Smid Cap vs. Fam Equity Income Fund
Performance |
| Timeline |
| Conestoga Smid Cap |
| Fam Equity Income |
Conestoga Smid and Fam Equity-income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conestoga Smid and Fam Equity-income
The main advantage of trading using opposite Conestoga Smid and Fam Equity-income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conestoga Smid position performs unexpectedly, Fam Equity-income 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 Fam Equity-income will offset losses from the drop in Fam Equity-income's long position.| Conestoga Smid vs. Conestoga Small Cap | Conestoga Smid vs. Ycg Enhanced Fund | Conestoga Smid vs. Df Dent Premier | Conestoga Smid vs. Polen Growth Fund |
| Fam Equity-income vs. Fam Value Fund | Fam Equity-income vs. Fam Small Cap | Fam Equity-income vs. Ycg Enhanced Fund | Fam Equity-income vs. Aegis Value Fund |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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