Correlation Between Champlain Small and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Europacific Growth 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 Europacific Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Europacific Growth Fund, you can compare the effects of market volatilities on Champlain Small and Europacific Growth 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 Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Europacific Growth.
Diversification Opportunities for Champlain Small and Europacific Growth
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champlain and Europacific is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth 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 Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Champlain Small i.e., Champlain Small and Europacific Growth go up and down completely randomly.
Pair Corralation between Champlain Small and Europacific Growth
Assuming the 90 days horizon Champlain Small is expected to generate 1.39 times more return on investment than Europacific Growth. However, Champlain Small is 1.39 times more volatile than Europacific Growth Fund. It trades about 0.05 of its potential returns per unit of risk. Europacific Growth Fund is currently generating about 0.05 per unit of risk. If you would invest 1,977 in Champlain Small on September 12, 2024 and sell it today you would earn a total of 580.00 from holding Champlain Small or generate 29.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Europacific Growth Fund
Performance |
| Timeline |
| Champlain Small |
| Europacific Growth |
Champlain Small and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Europacific Growth
The main advantage of trading using opposite Champlain Small and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth'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 |
| Europacific Growth vs. Lebenthal Lisanti Small | Europacific Growth vs. Champlain Small | Europacific Growth vs. Guidemark Smallmid Cap | Europacific Growth vs. Ab Small 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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