Correlation Between Champlain Small and Sit Small
Can any of the company-specific risk be diversified away by investing in both Champlain Small and Sit Small 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 Sit Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champlain Small and Sit Small Cap, you can compare the effects of market volatilities on Champlain Small and Sit Small 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 Sit Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champlain Small and Sit Small.
Diversification Opportunities for Champlain Small and Sit Small
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Champlain and Sit is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Small and Sit Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Small Cap 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 Sit Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Small Cap has no effect on the direction of Champlain Small i.e., Champlain Small and Sit Small go up and down completely randomly.
Pair Corralation between Champlain Small and Sit Small
Assuming the 90 days horizon Champlain Small is expected to generate 1.13 times more return on investment than Sit Small. However, Champlain Small is 1.13 times more volatile than Sit Small Cap. It trades about 0.11 of its potential returns per unit of risk. Sit Small Cap is currently generating about -0.09 per unit of risk. If you would invest 2,517 in Champlain Small on September 13, 2024 and sell it today you would earn a total of 57.00 from holding Champlain Small or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champlain Small vs. Sit Small Cap
Performance |
| Timeline |
| Champlain Small |
| Sit Small Cap |
Champlain Small and Sit Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champlain Small and Sit Small
The main advantage of trading using opposite Champlain Small and Sit Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champlain Small position performs unexpectedly, Sit Small 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 Sit Small will offset losses from the drop in Sit Small'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 |
| Sit Small vs. Champlain Small | Sit Small vs. Lebenthal Lisanti Small | Sit Small vs. Guidemark Smallmid Cap | Sit Small vs. Siit Small Mid |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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