Correlation Between Champlain Small and Deutsche Multi
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Deutsche Multi 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 Deutsche Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Deutsche Multi Asset Moderate, you can compare the effects of market volatilities on Champlain Small and Deutsche Multi 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 Deutsche Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Deutsche Multi.
Diversification Opportunities for Champlain Small and Deutsche Multi
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Champlain and Deutsche is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Deutsche Multi Asset Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Multi Asset 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 Deutsche Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Multi Asset has no effect on the direction of Champlain Small i.e., Champlain Small and Deutsche Multi go up and down completely randomly.
Pair Corralation between Champlain Small and Deutsche Multi
Assuming the 90 days horizon Champlain Small is expected to generate 2.11 times more return on investment than Deutsche Multi. However, Champlain Small is 2.11 times more volatile than Deutsche Multi Asset Moderate. It trades about 0.08 of its potential returns per unit of risk. Deutsche Multi Asset Moderate is currently generating about 0.1 per unit of risk. If you would invest 2,097 in Champlain Small on September 12, 2024 and sell it today you would earn a total of 477.00 from holding Champlain Small or generate 22.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Deutsche Multi Asset Moderate
Performance |
| Timeline |
| Champlain Small |
| Deutsche Multi Asset |
Champlain Small and Deutsche Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Deutsche Multi
The main advantage of trading using opposite Champlain Small and Deutsche Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Deutsche Multi 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 Deutsche Multi will offset losses from the drop in Deutsche Multi's long position.| Champlain Small vs. Needham Aggressive Growth | Champlain Small vs. Ultramid Cap Profund Ultramid Cap | Champlain Small vs. HUMANA INC | Champlain Small vs. Barloworld Ltd ADR |
| Deutsche Multi vs. Strategic Allocation Servative | Deutsche Multi vs. Strategic Allocation Aggressive | Deutsche Multi vs. Value Fund Investor | Deutsche Multi vs. International Growth Fund |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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