Correlation Between Champlain Small and Stocksplus Total
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Stocksplus Total 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 Stocksplus Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Stocksplus Total Return, you can compare the effects of market volatilities on Champlain Small and Stocksplus Total 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 Stocksplus Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Stocksplus Total.
Diversification Opportunities for Champlain Small and Stocksplus Total
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Champlain and Stocksplus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Stocksplus Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stocksplus Total Return 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 Stocksplus Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stocksplus Total Return has no effect on the direction of Champlain Small i.e., Champlain Small and Stocksplus Total go up and down completely randomly.
Pair Corralation between Champlain Small and Stocksplus Total
Assuming the 90 days horizon Champlain Small is expected to generate 3.51 times less return on investment than Stocksplus Total. In addition to that, Champlain Small is 1.43 times more volatile than Stocksplus Total Return. It trades about 0.02 of its total potential returns per unit of risk. Stocksplus Total Return is currently generating about 0.1 per unit of volatility. If you would invest 841.00 in Stocksplus Total Return on November 27, 2024 and sell it today you would earn a total of 397.00 from holding Stocksplus Total Return or generate 47.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Stocksplus Total Return
Performance |
| Timeline |
| Champlain Small |
| Stocksplus Total Return |
Champlain Small and Stocksplus Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Stocksplus Total
The main advantage of trading using opposite Champlain Small and Stocksplus Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Stocksplus Total 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 Stocksplus Total will offset losses from the drop in Stocksplus Total'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 |
| Stocksplus Total vs. Financial Industries Fund | Stocksplus Total vs. Financial Services Portfolio | Stocksplus Total vs. Fidelity Advisor Financial | Stocksplus Total vs. Goldman Sachs Financial |
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 CEOs Directory module to screen CEOs from public companies around the world.
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