Correlation Between Champlain Small and California High
Can any of the company-specific risk be diversified away by investing in both Champlain Small and California High 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 California High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and California High Yield Municipal, you can compare the effects of market volatilities on Champlain Small and California High 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 California High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and California High.
Diversification Opportunities for Champlain Small and California High
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Champlain and California is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and California High Yield Municipa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California High Yield 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 California High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California High Yield has no effect on the direction of Champlain Small i.e., Champlain Small and California High go up and down completely randomly.
Pair Corralation between Champlain Small and California High
Assuming the 90 days horizon Champlain Small is expected to generate 4.05 times more return on investment than California High. However, Champlain Small is 4.05 times more volatile than California High Yield Municipal. It trades about 0.05 of its potential returns per unit of risk. California High Yield Municipal is currently generating about 0.08 per unit of risk. If you would invest 1,976 in Champlain Small on September 13, 2024 and sell it today you would earn a total of 598.00 from holding Champlain Small or generate 30.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. California High Yield Municipa
Performance |
| Timeline |
| Champlain Small |
| California High Yield |
Champlain Small and California High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and California High
The main advantage of trading using opposite Champlain Small and California High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, California High 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 California High will offset losses from the drop in California High'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 |
| California High vs. Franklin Gold Precious | California High vs. Invesco Gold Special | California High vs. Great West Goldman Sachs | California High vs. Vy Goldman Sachs |
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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