Correlation Between Champlain Small and Virtus Kar
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Virtus Kar 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 Virtus Kar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Virtus Kar Small Cap, you can compare the effects of market volatilities on Champlain Small and Virtus Kar 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 Virtus Kar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Virtus Kar.
Diversification Opportunities for Champlain Small and Virtus Kar
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Champlain and Virtus is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Virtus Kar Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Kar Small 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 Virtus Kar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Kar Small has no effect on the direction of Champlain Small i.e., Champlain Small and Virtus Kar go up and down completely randomly.
Pair Corralation between Champlain Small and Virtus Kar
Assuming the 90 days horizon Champlain Small is expected to generate 1.0 times more return on investment than Virtus Kar. However, Champlain Small is 1.0 times less risky than Virtus Kar. It trades about 0.29 of its potential returns per unit of risk. Virtus Kar Small Cap is currently generating about 0.2 per unit of risk. If you would invest 2,312 in Champlain Small on August 29, 2024 and sell it today you would earn a total of 245.00 from holding Champlain Small or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Virtus Kar Small Cap
Performance |
| Timeline |
| Champlain Small |
| Virtus Kar Small |
Champlain Small and Virtus Kar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Virtus Kar
The main advantage of trading using opposite Champlain Small and Virtus Kar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Virtus Kar 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 Virtus Kar will offset losses from the drop in Virtus Kar's long position.| Champlain Small vs. Putnam Equity Income | Champlain Small vs. Putnam Growth Opportunities | Champlain Small vs. HUMANA INC | Champlain Small vs. Aquagold International |
| Virtus Kar vs. Virtus Kar Small Cap | Virtus Kar vs. Virtus Kar Small Cap | Virtus Kar vs. Virtus Kar Small Cap | Virtus Kar vs. Virtus Kar Mid Cap |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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