Correlation Between Champlain Small and Alpine Global
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Alpine Global 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 Small and Alpine Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Alpine Global Infrastructure, you can compare the effects of market volatilities on Champlain Small and Alpine Global 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 Small with a short position of Alpine Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Alpine Global.
Diversification Opportunities for Champlain Small and Alpine Global
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Champlain and Alpine is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Alpine Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine Global Infras and Champlain Small 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 Small are associated (or correlated) with Alpine Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine Global Infras has no effect on the direction of Champlain Small i.e., Champlain Small and Alpine Global go up and down completely randomly.
Pair Corralation between Champlain Small and Alpine Global
Assuming the 90 days horizon Champlain Small is expected to generate 1.04 times more return on investment than Alpine Global. However, Champlain Small is 1.04 times more volatile than Alpine Global Infrastructure. It trades about 0.19 of its potential returns per unit of risk. Alpine Global Infrastructure is currently generating about 0.1 per unit of risk. If you would invest 2,238 in Champlain Small on November 3, 2024 and sell it today you would earn a total of 79.00 from holding Champlain Small or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Alpine Global Infrastructure
Performance |
| Timeline |
| Champlain Small |
| Alpine Global Infras |
Champlain Small and Alpine Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Alpine Global
The main advantage of trading using opposite Champlain Small and Alpine Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Alpine Global 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 Alpine Global will offset losses from the drop in Alpine Global's long position.| Champlain Small vs. The Hartford Midcap | Champlain Small vs. Mfs Emerging Markets | Champlain Small vs. Wells Fargo Special | Champlain Small vs. Washington Mutual Investors |
| Alpine Global vs. Tortoise Energy Independence | Alpine Global vs. Icon Natural Resources | Alpine Global vs. Ivy Natural Resources | Alpine Global vs. World Energy Fund |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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