Correlation Between Chestnut Street and Great-west Core
Can any of the company-specific risk be diversified away by investing in both Chestnut Street and Great-west Core 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 Chestnut Street and Great-west Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chestnut Street Exchange and Great West E Strategies, you can compare the effects of market volatilities on Chestnut Street and Great-west Core 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 Chestnut Street with a short position of Great-west Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Great-west Core.
Diversification Opportunities for Chestnut Street and Great-west Core
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chestnut and Great-west is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange and Great West E Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great-west Core and Chestnut Street 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 Chestnut Street Exchange are associated (or correlated) with Great-west Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great-west Core has no effect on the direction of Chestnut Street i.e., Chestnut Street and Great-west Core go up and down completely randomly.
Pair Corralation between Chestnut Street and Great-west Core
Assuming the 90 days horizon Chestnut Street is expected to generate 1.25 times less return on investment than Great-west Core. But when comparing it to its historical volatility, Chestnut Street Exchange is 1.18 times less risky than Great-west Core. It trades about 0.11 of its potential returns per unit of risk. Great West E Strategies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,234 in Great West E Strategies on August 31, 2024 and sell it today you would earn a total of 506.00 from holding Great West E Strategies or generate 41.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chestnut Street Exchange vs. Great West E Strategies
Performance |
| Timeline |
| Chestnut Street Exchange |
| Great-west Core |
Chestnut Street and Great-west Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chestnut Street and Great-west Core
The main advantage of trading using opposite Chestnut Street and Great-west Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street position performs unexpectedly, Great-west Core 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 Great-west Core will offset losses from the drop in Great-west Core's long position.| Chestnut Street vs. The Hartford Small | Chestnut Street vs. Vanguard Small Cap Growth | Chestnut Street vs. Chartwell Small Cap | Chestnut Street vs. Us Small Cap |
| Great-west Core vs. Aquagold International | Great-west Core vs. Morningstar Unconstrained Allocation | Great-west Core vs. Thrivent High Yield | Great-west Core vs. Via Renewables |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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