Correlation Between Champlain Small and World Ex
Can any of the company-specific risk be diversified away by investing in both Champlain Small and World Ex 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 World Ex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and World Ex Core, you can compare the effects of market volatilities on Champlain Small and World Ex 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 World Ex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and World Ex.
Diversification Opportunities for Champlain Small and World Ex
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Champlain and World is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and World Ex Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Ex Core 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 World Ex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Ex Core has no effect on the direction of Champlain Small i.e., Champlain Small and World Ex go up and down completely randomly.
Pair Corralation between Champlain Small and World Ex
Assuming the 90 days horizon Champlain Small is expected to under-perform the World Ex. In addition to that, Champlain Small is 1.25 times more volatile than World Ex Core. It trades about -0.13 of its total potential returns per unit of risk. World Ex Core is currently generating about 0.24 per unit of volatility. If you would invest 1,332 in World Ex Core on November 27, 2024 and sell it today you would earn a total of 40.00 from holding World Ex Core or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. World Ex Core
Performance |
| Timeline |
| Champlain Small |
| World Ex Core |
Champlain Small and World Ex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and World Ex
The main advantage of trading using opposite Champlain Small and World Ex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, World Ex 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 World Ex will offset losses from the drop in World Ex'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 |
| World Ex vs. Guidemark Large Cap | World Ex vs. Jpmorgan Large Cap | World Ex vs. Old Westbury Large | World Ex vs. Profunds Large Cap Growth |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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