Correlation Between Champlain Small and Ab Global
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Ab 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 Ab 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 Ab Global Risk, you can compare the effects of market volatilities on Champlain Small and Ab 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 Ab Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Ab Global.
Diversification Opportunities for Champlain Small and Ab Global
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Champlain and CABIX is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Ab Global Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Risk 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Risk has no effect on the direction of Champlain Small i.e., Champlain Small and Ab Global go up and down completely randomly.
Pair Corralation between Champlain Small and Ab Global
Assuming the 90 days horizon Champlain Small is expected to generate 1.69 times more return on investment than Ab Global. However, Champlain Small is 1.69 times more volatile than Ab Global Risk. It trades about 0.19 of its potential returns per unit of risk. Ab Global Risk is currently generating about 0.2 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Ab Global Risk
Performance |
| Timeline |
| Champlain Small |
| Ab Global Risk |
Champlain Small and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Ab Global
The main advantage of trading using opposite Champlain Small and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Ab 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 Ab Global will offset losses from the drop in Ab 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 |
| Ab Global vs. The Hartford High | Ab Global vs. One Choice Portfolio | Ab Global vs. Gugg Actv Invmt | Ab Global vs. Goldman Sachs High |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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