Correlation Between Champlain Mid and Federated Short
Can any of the company-specific risk be diversified away by investing in both Champlain Mid and Federated Short 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 Champlain Mid and Federated Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Mid Cap and Federated Short Term Income, you can compare the effects of market volatilities on Champlain Mid and Federated Short 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 Champlain Mid with a short position of Federated Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Mid and Federated Short.
Diversification Opportunities for Champlain Mid and Federated Short
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Champlain and Federated is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Mid Cap and Federated Short Term Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Short Term and Champlain Mid 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 Champlain Mid Cap are associated (or correlated) with Federated Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Short Term has no effect on the direction of Champlain Mid i.e., Champlain Mid and Federated Short go up and down completely randomly.
Pair Corralation between Champlain Mid and Federated Short
Assuming the 90 days horizon Champlain Mid Cap is expected to generate 8.2 times more return on investment than Federated Short. However, Champlain Mid is 8.2 times more volatile than Federated Short Term Income. It trades about 0.1 of its potential returns per unit of risk. Federated Short Term Income is currently generating about 0.24 per unit of risk. If you would invest 2,555 in Champlain Mid Cap on September 14, 2024 and sell it today you would earn a total of 51.00 from holding Champlain Mid Cap or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Mid Cap vs. Federated Short Term Income
Performance |
| Timeline |
| Champlain Mid Cap |
| Federated Short Term |
Champlain Mid and Federated Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Mid and Federated Short
The main advantage of trading using opposite Champlain Mid and Federated Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Mid position performs unexpectedly, Federated Short 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 Federated Short will offset losses from the drop in Federated Short's long position.| Champlain Mid vs. Champlain Small Pany | Champlain Mid vs. T Rowe Price | Champlain Mid vs. American Mutual Fund | Champlain Mid vs. Loomis Sayles Growth |
| Federated Short vs. Franklin Growth Opportunities | Federated Short vs. Champlain Mid Cap | Federated Short vs. L Abbett Growth | Federated Short vs. Small Pany Growth |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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