Correlation Between Champlain Small and Johcm Emerging

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Can any of the company-specific risk be diversified away by investing in both Champlain Small and Johcm Emerging 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 Johcm Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Johcm Emerging Markets, you can compare the effects of market volatilities on Champlain Small and Johcm Emerging 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 Johcm Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Johcm Emerging.

Diversification Opportunities for Champlain Small and Johcm Emerging

-0.63
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Champlain and Johcm is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Johcm Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm Emerging Markets 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 Johcm Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm Emerging Markets has no effect on the direction of Champlain Small i.e., Champlain Small and Johcm Emerging go up and down completely randomly.

Pair Corralation between Champlain Small and Johcm Emerging

Assuming the 90 days horizon Champlain Small is expected to generate 1.37 times more return on investment than Johcm Emerging. However, Champlain Small is 1.37 times more volatile than Johcm Emerging Markets. It trades about 0.08 of its potential returns per unit of risk. Johcm Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest  2,047  in Champlain Small on September 14, 2024 and sell it today you would earn a total of  504.00  from holding Champlain Small or generate 24.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Champlain Small  vs.  Johcm Emerging Markets

 Performance 
       Timeline  
Champlain Small 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Champlain Small are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Champlain Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Johcm Emerging Markets 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Johcm Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Champlain Small and Johcm Emerging Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Champlain Small and Johcm Emerging

The main advantage of trading using opposite Champlain Small and Johcm Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Johcm Emerging 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 Johcm Emerging will offset losses from the drop in Johcm Emerging's long position.
The idea behind Champlain Small and Johcm Emerging Markets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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