Correlation Between Champlain Small and James Alpha
Can any of the company-specific risk be diversified away by investing in both Champlain Small and James Alpha 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 James Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and James Alpha Managed, you can compare the effects of market volatilities on Champlain Small and James Alpha 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 James Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and James Alpha.
Diversification Opportunities for Champlain Small and James Alpha
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Champlain and James is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and James Alpha Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Alpha Managed 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 James Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Alpha Managed has no effect on the direction of Champlain Small i.e., Champlain Small and James Alpha go up and down completely randomly.
Pair Corralation between Champlain Small and James Alpha
Assuming the 90 days horizon Champlain Small is expected to generate 2.37 times more return on investment than James Alpha. However, Champlain Small is 2.37 times more volatile than James Alpha Managed. It trades about 0.12 of its potential returns per unit of risk. James Alpha Managed is currently generating about 0.14 per unit of risk. If you would invest 2,149 in Champlain Small on September 3, 2024 and sell it today you would earn a total of 403.00 from holding Champlain Small or generate 18.75% 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. James Alpha Managed
Performance |
| Timeline |
| Champlain Small |
| James Alpha Managed |
Champlain Small and James Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and James Alpha
The main advantage of trading using opposite Champlain Small and James Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, James Alpha 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 James Alpha will offset losses from the drop in James Alpha'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 |
| James Alpha vs. Goldman Sachs High | James Alpha vs. Pioneer High Yield | James Alpha vs. T Rowe Price | James Alpha vs. Metropolitan West 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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