Correlation Between Champlain Small and The Hartford
Can any of the company-specific risk be diversified away by investing in both Champlain Small and The Hartford 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 The Hartford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and The Hartford Midcap, you can compare the effects of market volatilities on Champlain Small and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and The Hartford.
Diversification Opportunities for Champlain Small and The Hartford
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Champlain and The is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and The Hartford Midcap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Midcap 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Midcap has no effect on the direction of Champlain Small i.e., Champlain Small and The Hartford go up and down completely randomly.
Pair Corralation between Champlain Small and The Hartford
Assuming the 90 days horizon Champlain Small is expected to generate 1.44 times more return on investment than The Hartford. However, Champlain Small is 1.44 times more volatile than The Hartford Midcap. It trades about 0.33 of its potential returns per unit of risk. The Hartford Midcap is currently generating about 0.37 per unit of risk. If you would invest 2,312 in Champlain Small on August 28, 2024 and sell it today you would earn a total of 270.00 from holding Champlain Small or generate 11.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Champlain Small vs. The Hartford Midcap
Performance |
| Timeline |
| Champlain Small |
| Hartford Midcap |
Champlain Small and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and The Hartford
The main advantage of trading using opposite Champlain Small and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford's long position.| Champlain Small vs. Washington Mutual Investors | Champlain Small vs. Baron Emerging Markets | Champlain Small vs. Aquagold International | Champlain Small vs. Morningstar Unconstrained Allocation |
| The Hartford vs. Europacific Growth Fund | The Hartford vs. Washington Mutual Investors | The Hartford vs. Wells Fargo Special | The Hartford 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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