Correlation Between Champlain Small and Mainstay
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Mainstay 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 Mainstay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Mainstay Sp 500, you can compare the effects of market volatilities on Champlain Small and Mainstay 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 Mainstay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Mainstay.
Diversification Opportunities for Champlain Small and Mainstay
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Champlain and Mainstay is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Mainstay Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Sp 500 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 Mainstay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Sp 500 has no effect on the direction of Champlain Small i.e., Champlain Small and Mainstay go up and down completely randomly.
Pair Corralation between Champlain Small and Mainstay
Assuming the 90 days horizon Champlain Small is expected to generate 1.89 times more return on investment than Mainstay. However, Champlain Small is 1.89 times more volatile than Mainstay Sp 500. It trades about 0.34 of its potential returns per unit of risk. Mainstay Sp 500 is currently generating about 0.16 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. Mainstay Sp 500
Performance |
| Timeline |
| Champlain Small |
| Mainstay Sp 500 |
Champlain Small and Mainstay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Mainstay
The main advantage of trading using opposite Champlain Small and Mainstay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Mainstay 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 Mainstay will offset losses from the drop in Mainstay'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 |
| Mainstay vs. Fidelity Advisor Health | Mainstay vs. Delaware Healthcare Fund | Mainstay vs. Alphacentric Lifesci Healthcare | Mainstay vs. Invesco Global Health |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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