Correlation Between Chestnut Street and Stringer Growth
Can any of the company-specific risk be diversified away by investing in both Chestnut Street and Stringer Growth 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 Stringer Growth 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 Stringer Growth Fund, you can compare the effects of market volatilities on Chestnut Street and Stringer Growth 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 Stringer Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Stringer Growth.
Diversification Opportunities for Chestnut Street and Stringer Growth
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chestnut and Stringer is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange and Stringer Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stringer Growth 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 Stringer Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stringer Growth has no effect on the direction of Chestnut Street i.e., Chestnut Street and Stringer Growth go up and down completely randomly.
Pair Corralation between Chestnut Street and Stringer Growth
Assuming the 90 days horizon Chestnut Street Exchange is expected to generate 1.01 times more return on investment than Stringer Growth. However, Chestnut Street is 1.01 times more volatile than Stringer Growth Fund. It trades about 0.05 of its potential returns per unit of risk. Stringer Growth Fund is currently generating about -0.01 per unit of risk. If you would invest 115,568 in Chestnut Street Exchange on November 6, 2024 and sell it today you would earn a total of 2,325 from holding Chestnut Street Exchange or generate 2.01% 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. Stringer Growth Fund
Performance |
| Timeline |
| Chestnut Street Exchange |
| Stringer Growth |
Chestnut Street and Stringer Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chestnut Street and Stringer Growth
The main advantage of trading using opposite Chestnut Street and Stringer Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street position performs unexpectedly, Stringer Growth 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 Stringer Growth will offset losses from the drop in Stringer Growth's long position.| Chestnut Street vs. Baird Quality Intermediate | Chestnut Street vs. Bbh Intermediate Municipal | Chestnut Street vs. Ultra Short Fixed Income | Chestnut Street vs. Barings High Yield |
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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 Valuation module to check real value of public entities based on technical and fundamental data.
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