Correlation Between Champlain Small and Baron Emerging
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Baron Emerging 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 Baron Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Baron Emerging Markets, you can compare the effects of market volatilities on Champlain Small and Baron Emerging 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 Baron Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Baron Emerging.
Diversification Opportunities for Champlain Small and Baron Emerging
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Champlain and Baron is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Baron Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Emerging Markets 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 Baron Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Emerging Markets has no effect on the direction of Champlain Small i.e., Champlain Small and Baron Emerging go up and down completely randomly.
Pair Corralation between Champlain Small and Baron Emerging
Assuming the 90 days horizon Champlain Small is expected to generate 0.9 times more return on investment than Baron Emerging. However, Champlain Small is 1.12 times less risky than Baron Emerging. It trades about 0.16 of its potential returns per unit of risk. Baron Emerging Markets is currently generating about 0.08 per unit of risk. If you would invest 2,256 in Champlain Small on November 9, 2024 and sell it today you would earn a total of 65.00 from holding Champlain Small or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Baron Emerging Markets
Performance |
| Timeline |
| Champlain Small |
| Baron Emerging Markets |
Champlain Small and Baron Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Baron Emerging
The main advantage of trading using opposite Champlain Small and Baron Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Baron Emerging 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 Baron Emerging will offset losses from the drop in Baron Emerging'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 |
| Baron Emerging vs. Eaton Vance Income | Baron Emerging vs. Baird Aggregate Bond | Baron Emerging vs. Champlain Small | Baron Emerging vs. Mfs Emerging Markets |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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