Correlation Between Champlain Small and Boston Mon
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Boston Mon 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 Boston Mon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Boston Mon Equity, you can compare the effects of market volatilities on Champlain Small and Boston Mon 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 Boston Mon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Boston Mon.
Diversification Opportunities for Champlain Small and Boston Mon
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Champlain and Boston is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Boston Mon Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Mon Equity 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 Boston Mon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Mon Equity has no effect on the direction of Champlain Small i.e., Champlain Small and Boston Mon go up and down completely randomly.
Pair Corralation between Champlain Small and Boston Mon
Assuming the 90 days horizon Champlain Small is expected to generate 1.83 times more return on investment than Boston Mon. However, Champlain Small is 1.83 times more volatile than Boston Mon Equity. It trades about 0.18 of its potential returns per unit of risk. Boston Mon Equity is currently generating about 0.18 per unit of risk. If you would invest 2,241 in Champlain Small on September 12, 2024 and sell it today you would earn a total of 316.00 from holding Champlain Small or generate 14.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Champlain Small vs. Boston Mon Equity
Performance |
| Timeline |
| Champlain Small |
| Boston Mon Equity |
Champlain Small and Boston Mon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Boston Mon
The main advantage of trading using opposite Champlain Small and Boston Mon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Boston Mon 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 Boston Mon will offset losses from the drop in Boston Mon's long position.| Champlain Small vs. Needham Aggressive Growth | Champlain Small vs. Ultramid Cap Profund Ultramid Cap | Champlain Small vs. HUMANA INC | Champlain Small vs. Barloworld Ltd ADR |
| Boston Mon vs. Siit High Yield | Boston Mon vs. Western Asset High | Boston Mon vs. Lgm Risk Managed | Boston Mon vs. Franklin High Income |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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