Correlation Between Chestnut Street and Virginia Bond
Can any of the company-specific risk be diversified away by investing in both Chestnut Street and Virginia Bond 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 Virginia Bond 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 Virginia Bond Fund, you can compare the effects of market volatilities on Chestnut Street and Virginia Bond 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 Virginia Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Virginia Bond.
Diversification Opportunities for Chestnut Street and Virginia Bond
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chestnut and Virginia is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange and Virginia Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virginia Bond 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 Virginia Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virginia Bond has no effect on the direction of Chestnut Street i.e., Chestnut Street and Virginia Bond go up and down completely randomly.
Pair Corralation between Chestnut Street and Virginia Bond
Assuming the 90 days horizon Chestnut Street Exchange is expected to generate 1.96 times more return on investment than Virginia Bond. However, Chestnut Street is 1.96 times more volatile than Virginia Bond Fund. It trades about 0.11 of its potential returns per unit of risk. Virginia Bond Fund is currently generating about 0.13 per unit of risk. If you would invest 116,259 in Chestnut Street Exchange on September 14, 2024 and sell it today you would earn a total of 1,068 from holding Chestnut Street Exchange or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chestnut Street Exchange vs. Virginia Bond Fund
Performance |
| Timeline |
| Chestnut Street Exchange |
| Virginia Bond |
Chestnut Street and Virginia Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chestnut Street and Virginia Bond
The main advantage of trading using opposite Chestnut Street and Virginia Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street position performs unexpectedly, Virginia Bond 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 Virginia Bond will offset losses from the drop in Virginia Bond's long position.| Chestnut Street vs. Janus Global Technology | Chestnut Street vs. Invesco Technology Fund | Chestnut Street vs. Mfs Technology Fund | Chestnut Street vs. Science Technology Fund |
| Virginia Bond vs. Putnam Money Market | Virginia Bond vs. Blackrock Exchange Portfolio | Virginia Bond vs. The Gabelli Money | Virginia Bond vs. Chestnut Street Exchange |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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