Correlation Between The Growth and Chartwell Small
Can any of the company-specific risk be diversified away by investing in both The Growth and Chartwell Small 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 The Growth and Chartwell Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Growth Fund and Chartwell Small Cap, you can compare the effects of market volatilities on The Growth and Chartwell Small 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 The Growth with a short position of Chartwell Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Growth and Chartwell Small.
Diversification Opportunities for The Growth and Chartwell Small
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and Chartwell is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Growth Fund and Chartwell Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chartwell Small Cap and The Growth 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 The Growth Fund are associated (or correlated) with Chartwell Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chartwell Small Cap has no effect on the direction of The Growth i.e., The Growth and Chartwell Small go up and down completely randomly.
Pair Corralation between The Growth and Chartwell Small
Assuming the 90 days horizon The Growth is expected to generate 2.1 times less return on investment than Chartwell Small. But when comparing it to its historical volatility, The Growth Fund is 1.63 times less risky than Chartwell Small. It trades about 0.19 of its potential returns per unit of risk. Chartwell Small Cap is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,102 in Chartwell Small Cap on August 29, 2024 and sell it today you would earn a total of 198.00 from holding Chartwell Small Cap or generate 9.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Growth Fund vs. Chartwell Small Cap
Performance |
| Timeline |
| Growth Fund |
| Chartwell Small Cap |
The Growth and Chartwell Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Growth and Chartwell Small
The main advantage of trading using opposite The Growth and Chartwell Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Growth position performs unexpectedly, Chartwell Small 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 Chartwell Small will offset losses from the drop in Chartwell Small's long position.| The Growth vs. Counterpoint Tactical Municipal | The Growth vs. Franklin High Yield | The Growth vs. Ab Impact Municipal | The Growth vs. T Rowe Price |
| Chartwell Small vs. Vanguard Small Cap Value | Chartwell Small vs. Vanguard Small Cap Value | Chartwell Small vs. American Beacon Small |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |