Correlation Between Champlain Small and Champlain Mid
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Champlain Mid 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 Champlain Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Champlain Mid Cap, you can compare the effects of market volatilities on Champlain Small and Champlain Mid 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 Champlain Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Champlain Mid.
Diversification Opportunities for Champlain Small and Champlain Mid
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Champlain and Champlain is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Champlain Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Mid Cap 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 Champlain Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Mid Cap has no effect on the direction of Champlain Small i.e., Champlain Small and Champlain Mid go up and down completely randomly.
Pair Corralation between Champlain Small and Champlain Mid
Assuming the 90 days horizon Champlain Small is expected to generate 1.67 times more return on investment than Champlain Mid. However, Champlain Small is 1.67 times more volatile than Champlain Mid Cap. It trades about 0.26 of its potential returns per unit of risk. Champlain Mid Cap is currently generating about 0.36 per unit of risk. If you would invest 2,333 in Champlain Small on August 31, 2024 and sell it today you would earn a total of 219.00 from holding Champlain Small or generate 9.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Champlain Mid Cap
Performance |
| Timeline |
| Champlain Small |
| Champlain Mid Cap |
Champlain Small and Champlain Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Champlain Mid
The main advantage of trading using opposite Champlain Small and Champlain Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Champlain Mid 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 Champlain Mid will offset losses from the drop in Champlain Mid's long position.| Champlain Small vs. The Hartford Midcap | Champlain Small vs. Mfs Emerging Markets | Champlain Small vs. Wells Fargo Special | Champlain Small vs. Baron Emerging Markets |
| Champlain Mid vs. T Rowe Price | Champlain Mid vs. T Rowe Price | Champlain Mid vs. T Rowe Price | Champlain Mid vs. T Rowe Price |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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