Correlation Between Champlain Small and Brandes International
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Brandes International 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 Brandes International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Brandes International Equity, you can compare the effects of market volatilities on Champlain Small and Brandes International 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 Brandes International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Brandes International.
Diversification Opportunities for Champlain Small and Brandes International
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Champlain and Brandes is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Brandes International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes International 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 Brandes International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes International has no effect on the direction of Champlain Small i.e., Champlain Small and Brandes International go up and down completely randomly.
Pair Corralation between Champlain Small and Brandes International
Assuming the 90 days horizon Champlain Small is expected to generate 1.83 times more return on investment than Brandes International. However, Champlain Small is 1.83 times more volatile than Brandes International Equity. It trades about 0.17 of its potential returns per unit of risk. Brandes International Equity is currently generating about 0.18 per unit of risk. If you would invest 2,472 in Champlain Small on September 15, 2024 and sell it today you would earn a total of 79.00 from holding Champlain Small or generate 3.2% 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. Brandes International Equity
Performance |
| Timeline |
| Champlain Small |
| Brandes International |
Champlain Small and Brandes International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Brandes International
The main advantage of trading using opposite Champlain Small and Brandes International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Brandes International 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 Brandes International will offset losses from the drop in Brandes International's long position.| Champlain Small vs. Champlain Mid Cap | Champlain Small vs. Aberdeen Select International | Champlain Small vs. Marsico 21st Century | Champlain Small vs. Diamond Hill Large |
| Brandes International vs. Vy Columbia Small | Brandes International vs. Scout Small Cap | Brandes International vs. Champlain Small | Brandes International vs. Sp Smallcap 600 |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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